Taiwan's VIA and Intel in chipset face-off

By CNN's Kristie Lu Stout and reports

TAIPEI, Taiwan (CNN) -- Taiwan's VIA Technologies has unveiled the Apollo P4X266 chipset, a product that may set off another legal tangle with U.S. chip giant Intel.

VIA told CNN its latest offering is the first chipset to truly leverage the performance of the Intel Pentium 4 processor.

But there's a hitch -- Intel has yet to grant VIA a license to build the chipset.

"(VIA) designed the chipset knowing they are going to connect with the Pentium 4, and there is probably some technology in the chipset that only Intel owns," said Gartner Group semiconductor analyst Dorothy Lai.

Without Intel's blessing

"Intel owns the patent, so VIA has to buy the license from Intel. But Intel doesn't want to sell the license."

Without Intel's blessing, VIA launched its latest product -- a Double Data Ram (DDR) chipset that promises better performance than Intel's existing chipset, at a cheaper price.

Company CEO Chen Wen-chi told reporters last week that launching the Pentium 4 chipset without an Intel license would not be a legal dilemma.

VIA spokesperson John Gatt told CNN he could not comment on the Intel licensing issues.

Gatt calls the company's relationship with Intel "touch and go." VIA may be a small competitor for Intel in the processor market, but is a major rival in the chipset sector.

Touch and go

"Through our research, VIA has gained market share and that's why Intel feels threatened," said Gartner's Lai.

According to Gatt, the chipmaker claimed 43 percent of the chipset market last quarter, with Intel at 38 percent.

VIA chief executive Chen said he expects the new chipset to help lift VIA's market share to 50 percent.

The two companies squabbled before when VIA unveiled a similar product last year, but the case ultimately settled out of court.

According to VIA, all motherboard makers apart from Intel use its chipsets.

Taiwan PC maker Asustek has no plans to introduce any products based on the VIA chipset until all "legal issues" are solved, the Wall Street Journal reported on Wednesday.

So far, three motherboard makers out of Taiwan have announced that they are using the latest VIA chipset -- Soltek, ECS, and Epox.