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Technology Stocks : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: Patrick Grinsell who wrote (13798)	7/22/1999 7:39:00 PM
From: Obewon	Read Replies (1) \| Respond to of 16960

New friction developing between graphics industry company Trident and its integration partner VIA: (last paragraph mentions 3dfx and Nvidia) Graphics chip maker Trident Microsystems is suing itsdesign partner, Via Technologies, charging theTaiwan-based chip-set maker with breach of contract, fraud, and patent infringement. Trident's suit, which was announced by the company Thursday but will be officially filed Friday in a U.S. federal court, charges Via with breaking a carefully orchestrated marketing arrangement that existed between the two companies' jointly designed products. It also charges Via with illegally luring away 25 Trident engineers to its own design team. Representatives at Via's U.S headquarters in Fremont, Calif., said they were aware of Trident's suit, but had not formulated a response by publishing deadline time. Executives at Trident, based in Mountain View, Calif., said the company had a deal with Via under which Trident integrated its CyberBlade graphics core into two of Via's chip sets -- the MVP4 and ProMedia. Under the agreement, Via was supposed to market the MVP4 and ProMedia to desktop PC customers. Trident, meanwhile, which sells most of its graphics ICs into the portable computing market, was granted access to Via's core-logic technology and designed its own CyberBlade i7 and i1 parts for notebook PC OEMs. "We believe Via violated that fundamental market direction," said Gerry Liu, senior vice president of marketing at Trident. Liu said the Via agreement has led to "complaints and confusion" on the part of Trident's customers, who are unsure from which company they are supposed to buy their chip sets. Liu also said Via violated a separate agreement under which the companies were supposed to share revenue and profits from the sale of the chip sets. And, he added, law- enforcement agencies in Taiwan have searched offices at Via used by the former Trident employees looking for documents that may prove Via used illegal hiring practices. In its suit, Trident is seeking to halt sales of Via's MVP4 and ProMedia chip sets, and will ask for $200 million in punitive damages, plus an unspecified amount of actual damages. The litigation shows a crack in the façade of a block of companies whose common goal was to provide an alternative to Intel's architecture -- a group whose principal members include Via, Trident, Acer Laboratories, and National Semiconductor. Via has now been sued twice, once by Intel, which charged it with breaking the P6 bus license agreement signed by the two companies. Via then attempted to exploit a legal loophole, manufacturing its P6-based chip sets at National by piggybacking on a separate licensing agreement National has with Intel. Additionally, Via earlier this month bought National's discrete microprocessor subsidiary, Cyrix, which has been one of Intel's chief rivals. Via also has signed separate deals with graphics makers S3 and Trident for integrated chip sets. In advance of its suit, Trident signed a deal Wednesday with one of Via's rivals, which sources said was Acer Labs. The flurry of licensing deals is indicative of a trend among chip-set makers to seek out partners in the graphics industry with whom to develop integrated products. This phenomenon is being driven by the popularity of low-cost PCs, which have forced chip suppliers to develop integrated parts to lower their bill-of-materials cost. Save for San Jose, Calif.-based 3Dfx Interactive, every other mainstream PC graphics company has signed a deal to integrate its cores into a third-party core-logic chip set. Although Nvidia, in Santa Clara, Calif., has so far not publicly disclosed its own integration plans, the company hired Kenneth Ma away from Trident to become senior director of its integrated business. In an interview, Ma called the integration of graphics and core-logic "inevitable."