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A chip market is born
By Brooke Crothers
Staff Writer, CNET News.com
December 9, 1998, 5:10 a.m. PT
One of the world's largest makers of Intel-compatible chips may be close to cutting a deal with the chip giant, indicating that the Pentium II chipset market may finally be open for competition. But the price of admission is high.
SiS, which makes Intel-compatible chipsets, is close to signing an agreement with Intel regarding the rights to make Pentium II chipsets, according to sources at the Taiwanese company. The chipset, together with the main Pentium II processor, forms the core of a personal computer.
An Intel spokesperson declined to comment. A number of industry sources, who are familiar with the year-long talks the two companies have been engaged in, say that a final outcome is still not certain since talks can breakdown at any time before the final agreement is signed.
But one person familiar with the negotiations says SiS may have had a change of heart when another major chipset supplier cut a deal with the chip giant.
Last week, Via Technologies, the world's second largest chipset supplier, and Intel reached an agreement which covers Pentium II patent cross-licensing and protects Via from litigation in the event that its technology infringes on Intel patents.
SiS now appears amenable to a deal. "To provide 200 percent assurance to our customers, we have aggressively negotiated with Intel for the patent for over one year. We are now close to consummating the deal," a spokesperson at SiS said.
But these deals can come at a high price since Intel is intensely protective of its Pentium II intellectual property. Indeed, until very recently the Pentium II architecture remained highly proprietary to Intel and virtually closed to competing chipset makers.
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