This week Via is mounting a major campaign at Asia's largest computer show, Computex, to put its Pentium 4 chipset business back on track. The company estimates its market share has sunk to a low of 10% for Intel-compatible chipsets, from more than 40% during the heyday of PC-133.

Chipsets are Via's core business, so the path to profitability runs through that division. The company has remained in the red this year, with midyear losses totaling $51 million compared with a $32 million profit from January through June 2002 and $95 million during that period in 2001.

Sales were down by approximately 25% through June, but Chen thinks Via can climb into the black during the fourth quarter as a recovery in the IT business takes hold.

"The wind is definitely turning in the mainstream PC business," he said. "The global economic situation has touched bottom, the Iraq war is behind us, and SARS doesn't seem to have had a lasting impact. So while we won't see the PC market hitting double-digit growth, we will have a healthy increase."

To be in on that, Via this month is extending its line of products, highlighting at Computex its Intel-compatible PT880 chipset, with support for dual-channel DDR400, and its AMD-compatible K8T800 chipset, with support for dual 64-bit Opterons for workstations and dual-channel DDR, or a single 64-bit Athlon for performance PCs using single-channel DDR. The company this week will also promote its new graphics engine, the S3 Graphics Delta-Chrome, an eight-pixel pipeline Dir-ectX 9.0 graphics controller featuring an on-chip high-definition TV-out.

Chen also plans to campaign for the part of Via's business that deals with the convergence of computing and consumer devices, hoping to shepherd this shift in the electronics industry into a much needed boost to the company's bottom line.

Via has spent more than three years gathering the tools needed for its "Total Connectivity" strategy that leverages the PC infrastructure into the home entertainment environment. Arguably, the company sensed this industrywide shift before many of its peers, yet it hasn't been able to turn that advantage into high-volume sales.

Chen acknowledges that he is sometimes frustrated by this, but believes that consumers are just warming to the idea of a melding of the computing and consumer worlds. He also notes that Via has had numerous design wins for its convergence platform, dubbed Eden, but the lengthy design-in process of its clients"about 12 months, or twice that of a PC design cycle "has slowed introduction to market.

"All the products are not totally defined, like the PC is. So it's just a matter of waiting," he said. In the meantime, Chen expects to see better performance from some of Via's divisions that are usually overshadowed by the chipset operation. The company's audio chip business is an example. Via bought it but then let it languish as chipsets consumed most of management's time and energy.

"We did a very poor job with it," Chen said. "We had top technology and top people, but the audio chip business wasn't doing very well. I remember we had a six-channel codec two years before Realtek announced they had the world's first six-channel codec."

It was that sort of failure that "Project Canaan""a systematic spinning off of noncore businesses"was designed to correct.

Since the inception of that project, Via has taken its high-end audio chip, the Envy24, and introduced middle- and low-end versions, the Envy24HT-S and Envy24PT. The fuller line has doubled sales and pushed the audio business into profitability, according to the company. The same, Via said, is true of the networking business, where the company has long had a 10/100Base-T offering and recently introduced a Gigabit Ethernet chip.

Other segments still are struggling, however, including Via's high-profile CPU division. Chen said the processor business continues to be "very challenging," and in a rare kind word for his one-time nemesis, he said, "We should give Intel due credit. They are doing a very good job and they have strong control of this market."

Still, Chen believes his early focus on low-power CPUs was a gamble that will eventually pay off. With fewer people finding reason to buy souped-up, 3GHz PCs, Chen said that the focus will shift to low-power mobile platforms"the specialty for Via's line of C3 processors.

With Intel pushing its Centrino platform not so much for wireless connectivity as for greater mobility, Chen's early advocacy of a low-power mainstream PC platform is starting to look prescient. "We were the ones talking about a low-power processor earlier than they did, so we're glad they're now doing the same thing," he said. "We appreciate the Centrino concept."

By: DocMemory
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