SSB:VIA sampling AThlon DDR chipset,shipping KM133 Duron chipset in vol now
11/27/00 Excerpts
VIA TECHNOLOGIES: LEADING INDEPENDENT CHIPSET LEADER NOW TARGETING THE VALUE
PC SEGMENT.
It is hard to argue with VIA's track record: its has grown revenues from
$54.8 million in 1996 to about $983.0 million in 2000, a compounded annual
growth rate of 106%. In a slower growth market, the company still hopes to
grow revenues by at least 50% next year. It has largely achieved this kind of
growth by capitalizing on mistakes made by Intel (INTC, 2M, $23.94) and other
Taiwanese competitors in the chipset market, and now enjoys greater than 40%
share of that market.
VIA is reporting that Q4 demand for PCs remains weaker than anticipated, and
lays blame for at least part of that weakness on Intel's doorstep. Processor
shortages caused customer uncertainty, encouraging them to double order and
then cancel when supply improved. The company expects PC growth of about 14%
in Q4.
VIA is not buying the "convergence theory" that Internet Applications (IA)
will merge into handheld devices or cellular phones, extinguishing the low-
end of the PC market. VIA hopes to regenerate demand in the sub-$500 range
with its new family of processors, called Cyrix III. Priced at less than $50,
the Cyrix III (code named Samuel) will be sampling at 650MHz and 677MHz in
the next couple of weeks. By the end of Q1, the company expects to ship a
0.15-micron shrink version with added cache and running at 800MHz, and by
mid-year at 1GHz. The company sold over 1 million M2s this year and hopes to
sell at least 5 million C-III's in 2001. The plan is to initially target
"white box" OEMs in secondary and price-sensitive markets, like China, the
Middle East, and Eastern Europe. By Q1, the company fully anticipates
announcing Tier 1 and Tier 2 customers.
The company also plans to retain its technology leadership in chipsets next
year, leaning on its fast design cycles and low cost manufacturing at TSMC.
VIA is currently sampling an Advanced Micro# (AMD, 2S, $20.81) Athlon-based
DDR chipset, and will ramp volume of that product in Q1/Q2 as DDR prices come
more in line with SDRAM. The company will also begin supplying a DDR-based P4
chipset by Q2 of next year, at least one quarter ahead of Intel itself.
Finally, VIA sees further integration of graphics into the chipset or the
processor as increasingly important next year. Integrated graphics chipsets
should grow from about 20-30% of the company's total this year to about 50%
by the end of next year. VIA is now shipping the KM133 Duron chipset, with
greater volumes in December and January. In addition, the company will lean
heavily on its technology agreement with S3 to integrate that graphics into
the processor, called Samuel 2, which should launch at a $40-60 price point
in Q2 of next year. |
