Via plays David to the Intel goliath

WHAT IS THE BACKGROUND to the Intel-Via spat over Pentium 4 licences - an exchange that started with a balloon being pricked and followed with the mass briefing of lawyers for either side?

I'd like to put some pros and cons about the resulting legal fight and the hard road Via has decided to tread that may possibly cost the Taiwanese chipset company millions of dollars before the curtains close on this particular scene.

The main card Via has in this game of poker is that with its acquisition of the graphics business of S3, it has all the licences it needs to build a Pentium 4 chipset.

This is possibly true but Intel won't listen to this argument at all. Its business strategy is pretty straightforward. Everyone except Nvidia can buy a licence to build a Pentium 4 chipset with around $5 going into Santa Clara funds to boost its bottom line.

Via, in some respects, seems to have bearded the lion in its den and cause rage and anger in the Intel camp although whether Intel would have licensed the P4 chipset anyway is another point entirely.

Because Via hasn't a licence, it doesn't pay Intella the $5 but because of that, the biggest mobo makers in the world, Asustek, Gigabyte and MSI just won't deal with it, and it has been forced to start its own mobo business arm as well as selling quantities to smaller manufacturers who won't kowtow to Intel, or see advantages in using its P4 chipsets.

Supporting Via would likely mean that Intel would get all sniffy and not supply enough technology to them, so damaging their existing business.

There still are indications, however, that behind the scenes the Big Three are dallying with Via.

Winning the case in court is a long way off - patent infringements always make lawyers' meters tick, tick and tick again.

But in the meantime, Via is suffering, while its competitor SIS, which was nowhere even 18 months back, seems to be selling pkenty of its 645 sets, and has over 20 manufacturers building boards based on the chipset including Asus.

But is it worth Via following a path which leads its headlong against Intel, and in the process losing market share and money?

Or is it a matter of pride?

Even if Via wins this case in the long term, their competitors including SIS, ALI and ATI will continue to erode Pentium 4 market share.

Via has around 70 per cent of AMD Athlon chipset business but is rapidly finding itself being left behind in the P4 race because of this legal spat.

I believe Via should come to a rapid settlement with Intel just as soon as it can, whatever the rights and wrongs of the case.

Capitalism is largely amoral, and Via's fight here appears to be prompted by a sense that it is in the right, and right will triumph.

Yet if Via had a Pentium 4 licence, it might well be able to beat the others in the performance and pricing stakes, and in the process David's sling-thrown stone might hit the Goliath where it really hurts. µ