Via Technologies plans to spin off CPU business
By Macabe Keliher
Electronic Buyers' News
(03/20/00, 02:59:52 PM EST)
ebns.com
Taiwan chip designer Via Technologies Inc. said Monday
that it plans to spin off its CPU business into a separate
company in the second quarter of this year.
?We already have CPU products on the market, and
business is suitable to create a separate company to deal
exclusively with CPUs,? said We-chi Chen, president and
chief executive of Via.
Via will own the new company and invest between $100
million and $300 million in the venture. Chen said that he
considered acquiring a CPU company, but instead decided
to spin off the business.
?At a later date we may invite partners to invest or to
undertake some sort of cooperation agreement, but now it
will be solely Via-owned,? Chen said.
The CPU spin-off is still without a name. Chen said that Via
will choose a Chinese name for the new company.
Via will not change the CPU company's product line this
year, but intends to introduce new products next year, Chen
said.
Traditionally a chipset designer, Via has recently embarked
into CPU design, which Chen estimates will account for
about 10% of the company's revenue this year.
Chen said Via should meet conservative gross revenue
estimates of $650 million in calendar year 2000. Last year
the company grossed approximately $390 million.
?[CPU] market potential in Asia is very high. Growth over the
next two to three years looks strong. We look to become
Asia's largest IC-design house,? Chen said.
The core of its CPU sales will go to mainland China, a
market that Via is still breaking into. Chen said that next
year he hopes to take 30% of the CPU market in China and
50% of the chipset market.
This year, China will consume nearly 7 million computer
chips. Chen said Via could invest as much as $163 million
in opening the China market. Nearly 2,000 employees make
up Via's Chinese marketing force, which it plans to expand
this year.
In addition to expanding its CPU business, Via will enter the
Internet-appliance chip market, and hopes to have products
out within one to two years. Chen said before the end of the
year, it will announce its strategic partners.
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My comments:
(1)Look like Via's confidence in CPU is decreasing.
(2)Via will focus in greater China area.
If true, very good for AMD and Intel -- the perceived competitive presure will be downward a bit. Good for the stocks. |
