All, Article...Chips and Technologies Gives Intel a Graphics Foothold...
February 3, 1998
PC Week via Individual Inc. : Intel Corp. this week will begin to merge Chips and Technologies Inc. into its silicon empire.
Last July, the Santa Clara, Calif., company entered into an agreement to purchase Chips and Technologies for $420 million in cash. The purchase was finalized earlier this month after the Federal Trade Commission declined to seek a preliminary injunction against the deal.
Thanks to technology acquired in the deal, Intel will now be a competitor in the market for PC notebook graphics controllers and accelerators. In the third quarter of 1997, Chips and Technologies had 48 percent of the graphics controller market, said Mike Feibus, an analyst at Mercury Research Inc., in Scottsdale, Ariz., and a PC Week columnist.
"I don't think it changes the landscape much in the short time. However, in the long run it gives Intel some options," Feibus said. "Intel could use Chips and Technologies' expertise in both notebooks and desktops for future integrated memory and 64-bit graphics controllers."
Chips and Technologies, Intel, and Real 3D, a division of Lockheed Martin Corp., were jointly developing the i740, a desktop three-dimensional graphics chip. Intel also plans to bring the technology to market this quarter.
Product development plans
Intel officials declined to comment on unannounced products, such as the i740. However, Chips and Technologies officials have stated in the past that the company is pursuing product development efforts, which include producing graphics controllers for embedded systems, flat-panel LCD monitors and broadband media.
Using technology from the acquisition, Intel may also begin to incorporate graphics technology into the chip sets it uses to support forthcoming processors, Feibus said.
Before it launches new products, Intel will merge Chips and Technologies with its subsidiary, Intel Enterprise Corp. The combined entity will become a wholly owned subsidiary of Intel focusing on the graphics market, officials said.
The FTC held up the acquisition for nearly six months while it investigated complaints from competing graphics hardware vendors. It passed on the opportunity to seek a preliminary injunction against Intel and the acquisition earlier this month. After the FTC passed on the injunctions, Intel moved quickly to acquire all of Chips and Technologies' outstanding stock, some 23 million shares, before initiating the merger.
Intel officials declined further comment on Chips and Technologies' eventual place under the Intel umbrella.
Intel's competitors in the graphics market aren't sitting still, either. S3 Inc. last week announced that it has inked a deal to purchase several graphics patents from Cirrus Logic Inc.
S3 purchased 10 graphics patents and 25 graphics patent applications from Cirrus Logic for a price of $40 million. As part of a related deal, S3 has licensed those patents it did not purchase from Cirrus Logic via a cross- licensing agreement under which the two companies will have access to each others' graphics patents. Completion of both the patent purchase and the cross- licensing agreement is subject to approval from the FTC.
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Regards, Michael |
