Via derailed

Published: September 10th, 2001
Via derailed

They landed in Taipei at midnight, touching down at the headquarters of Via Technologies in a helicopter with the “Intel Inside” logo branded on the door. Out came the Pentium Power Rangers in their spacesuits, charging the microchip designer with weapons in hand, ready to lay yet another competitor to waste.

Isn’t this the first image that comes to mind when you read the countersuit Via filed earlier today in response to Intel’s allegations that the P4X266 violates some of its patents? In it, the company cites “willful destruction of Via property by Intel representatives and their employees.” What on Earth is going on over there?

The making of chipsets has never been a pretty business. Intel and Via are old foes, having gone to court over a similar chipset-related contretemps two years ago. In that case, regarding the Pentium III, the two companies settled, but this time Via may not be willing to compromise so easily.

Not long ago I wrote an editorial where I evaluated the prospects for Rambus, the memory manufacturer which seems to spend as much time in the courthouse as it does at the drawing board. At the time, it looked as though Intel was gradually pulling away its support for Rambus dynamic random access memory (RDRAM) by cutting subsidies to small manufacturers. This would have been a considerable about-face for Intel, which championed the design despite the fact that faulty motherboards with RDRAM-based chipsets essentially brought the PC OEM business to a screeching halt in late 1999. Nonetheless, when the 2 GHz Pentium 4 was launched a few weeks ago RDRAM was the required memory.

When I had lunch with Intel of Canada country manager Doug Cooper recently, he said the original subsidies were only supposed to help out OEMs who needed more volume. “If you were Dell, you could get it easily, but small OEMs needed some packages,” he said. “The price has come down to the point where that wasn’t really necessary anymore.”

With the release of the 845 chipset, however, Intel is offering PC makers a SDRAM alternative. So far nearly every big-name vendor, including Dell and Gateway, are opting for the cheaper memory. And why not? Though I’ve been told it’s a solid design with many performance advantages, Rambus has a checkered history that has not won Intel any fans in the corporate market. Most of those customers, however, wouldn’t blame Intel; they’d blame the PC makers. In the end, if the box doesn’t work, you don’t care if it’s the chip or the power cord.

This is where Via comes in. Having honed Double Data Rate (DDR) for several years, its chipsets promise cheaper Rambus-like high-speed performance without the horror stories. Though there will be considerable talk about pricing, that’s not really the issue here.

Similarly, patents have little to do with these lawsuits. By putting Via in the defendant’s chair, Intel pretty much guarantees that DDR DRAM will fail to capture a significant portion of the market. It’s hard to imagine many PC makers willing to embroil themselves in this potentially nasty situation. As long as they can supply adequate product at the appropriate price point, Via is on its own.

Perhaps Intel didn’t want to look foolish in having supported Rambus all this time. In that case, offering the 845 allows customers to decide, justifying the company in severing ties down the road. When the market improves, however, the demand for high-speed memory will become more important, and Intel has the marketing muscle to try and overcome bad attitudes toward RDRAM. Unless Via wins this suit — which will take more time than it can probably afford — Rambus may end up succeeding in spite of itself.

sschick@plesman.com

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