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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Dutch who wrote (23978)	6/30/1999 2:36:00 AM
From: Donald F. Figer	Respond to of 93625

The Rambus Plot Thickens as VIA Bids for Cyrix By Marcy Burstiner Staff Reporter 6/29/99 10:13 PM ET SAN FRANCISCO -- Cyrix, the maker of low-cost chips that National Semiconductor (NSM:NYSE) bought in November 1997, is again in play. Only this time, it's looking like Cyrix is a pawn in a gambit to stop Rambus (RMBS:Nasdaq) chip designs from taking over the memory market. Taiwanese chipset maker VIA Technologies is negotiating with National Semiconductor to buy Cyrix, Electronic Business News reported Tuesday, citing unnamed sources in Taiwan. Owning Cyrix could give VIA the patent rights it needs to sell Intel (INTC:Nasdaq)-compatible chipsets, which are seen as an alternative to processors based on Rambus' memory-enhancing designs. Representatives at VIA couldn't be reached for comment. National Semi spokesman Alan Bernheimer acknowledged Tuesday that VIA is one of at least three companies that have offered to buy Cyrix but he wouldn't disclose the names of the other bidders. "We are in negotiations with several partners," Bernheimer said. "We have 24 hours." If no buyer steps forth by Wednesday, National has resolved to shut down Cyrix and send its engineers and sales force packing. Tuesday, National Semi said it's sticking to that deadline. Rambus, the so-called chipless semiconductor company, has been trying for a decade to get the memory-chip industry to accept its revolutionary designs to speed up DRAM chips. Rambus stands to earn about 1.5% in royalties from DRAM chips using its design -- royalties which memory makers are loathe to pay. Rambus' key supporter, Intel, has had problems working out the kinks in its own Rambus-based chipset -- a device that connects the microprocessor to the memory. Intel has had to push back its planned rollout of the device from June to September. All the while, companies like VIA have been readying PC-133 SDRAM chipsets, which are seen as a stop-gap improvement on DRAM performance until faster and royalty-free technology can be developed. Intel had been dickering with VIA for months on what chipsets it can sell under a license agreement the two companies signed last November, according to one Intel official who spoke on condition of anonymity. On June 19, Intel canceled the agreement and five days later filed suit against VIA, alleging breach of contract and patent infringement. Intel argued that VIA was selling chipsets based on Intel patented technology that were excluded from the licensing agreement. VIA is reportedly not only negotiating with National Semi for acquisition of Cyrix but is also negotiating a deal to produce co-branded chipsets in order to have access to National's own cross-license agreement with Intel. VIA is partly owned by Formosa Plastics of Taiwan, which also partly owns Taiwanese motherboard maker First International Computer. Intel is the only company now that makes all three -- motherboards, microprocessors and chipsets -- giving it a cost advantage over competitors such as Advanced Micro Devices (AMD:NYSE). With Cyrix, VIA could also compete directly with Intel in the market for low-priced chips, says Linley Gwennap, vice president of tech research firm MicroDesign Resources. "Cyrix guys had good technology but were never able to move fast enough," says Nathan Brookwood, an analyst at Insight 64. "VIA has been relatively quick on its feet. The Taiwanese have been struggling to move up the technology food chain. A microprocessor would be a real feather in VIA's cap."