VIA will no longer have Intel inside
Taiwan's VIA Technologies will quit using Intel technology in its central processors next year and instead intends to expand its own technology portfolio.
A three-year agreement for VIA to use Intel's front-side bus (FSB) technology in its own central processing units expires in April next year and will not be renewed.
In public statements, VIA has said it will not renew licensing agreements because Intel's technology is not up to speed.
Privately, observers point to the royalty payments the Taiwan company must pay to Intel as a strong incentive for it to go it alone.
The technology at issue surrounds the front-side bus, the main architecture connecting the central processing unit to a computer's memory and other components.
The present licensing agreement was signed in 2003 at the conclusion of one of a series of messy lawsuits which saw Intel sue VIA for patent infringement.
Those lawsuits turned particularly nasty when Intel threatened to sue not only VIA but any motherboard maker which used any VIA products which included the allegedly infringing patents.
The long-running battles were settled out of court and are believed to have included an undisclosed cash payment to Intel as well as royalty deals.
VIA Technologies did not respond to requests for comment.
Replacing the Intel FSB technology will be VIA's own V4-Bus, launched in May and built into the new C7 processor which debuted at the same time. VIA is gradually making the switch with other CPU processor models, with the new FSB capable of speeds of up to 800Mhz.
Despite the supposedly improved bus speeds, the switch is unlikely to help VIA's weak CPU business, which accounts for just 15 to 20 per cent of sales. VIA's main revenue driver remains PC chipsets which connect a system's CPU to other parts of the motherboard.
Recently, however, margins on chipsets have been falling and companies are looking to new product lines to boost profitability.
'Chipsets are no longer an ignored segment of the market,' Deutsche Bank analyst John Leong said.
Mr Leong was neutral on VIA's switch, saying older Intel technology still have some advantages especially in the low-end market which VIA is targeting.
'There'll always be some cost-performance points at which you don't need a faster FSB,' he said.
