09.11.2001
VIA counter-sues Intel for patent infringement

• Development: Reacting to Intel’s patent infringement lawsuit, VIA filed counter-suits in US and Taiwan for patent infringement, anti-competitive behavior and willful destruction of property.

• Analysis: The infringement dispute arose out of negotiations on P4 royalties. It is the second following Intel’s 1999 patent infringement lawsuit on PC133 chipsets, which concluded with an out-of-court settlement in Jul ‘00. As Intel actively monitors customers’ P4 chipset adoption, sales of VIA’s P4X266 have been suppressed.

• Primasia View: At this juncture, the lawsuit is unlikely to affect VIA’s business. On the contrary, we believe it shows (1) that Intel recognizes VIA as a strong competitor, and (2) that VIA will finally get a chance to resolve product legality and royalty cost issues that tend to surface each time Intel launches a new platform. We maintain Outperform in the longer term.