Many probably read today that Intel sued VIA for patent infringement, then VIA turned around and sued Intel for essentially the same thing, stating that Intel needs a license from VIA in order to make the P4 and i845. This unexpected drama in VIA vs. Intel probably has left a lot of people scratching their heads.
I don’t have any insider information, but I do have a long memory. Here goes.
Once upon a time, there was a company called Exponential Technologies. We all remember Exponential. (Say yes.) Exponential was a tiny, fabless chip manufacturer that was going to employ some controversial and largely unproven techniques to produce high-speed microprocessors. Unwilling to charge into the crowded x86 marketplace (which already included Intel, AMD, Cyrix, IDT, and Rise), Exponential licensed the PowerPC instruction set from IBM and Motorola. The idea was that Exponential would use these techniques to produce CPUs at ridiculously high clock speeds. Indeed, five years ago next month, Exponential announced a 533 MHz PowerPC chip, dubbed the X704. Remember, in 1996 the hottest chip going was Intel’s 200 MHz Pentium Pro. IBM and Motorola had PowerPCs running at similar speeds.
Exponential and Apple
So what happened? The chip never hit the market and Exponential went bust. The X704 had great numbers, but it didn’t have the performance to match. It would have trounced everyone in the megahertz war. But Apple didn’t think people would pay the huge premium for such a small performance gain. Plus, Exponential had difficulty meeting the target speed–by May 1997, they had an inventory of 7,000 410-MHz chips. That was still pretty fast for 1997, especially by PowerPC standards–DEC‘s Alpha was running in the 400-500 MHz range at that time but it never resembled a mainstream chip–but the performance difference between the X704 and Motorola and IBM’s cheaper G3 wasn’t enough for Apple to be willing to take a chance on the newcomer.
Exponential looked around for ways to stay in business, including suing Apple (Apple had prevented the various clone manufacturers from using Exponential’s chip), then eventually liquidated its assets.
Isn’t it interesting that four years ago Apple opted not to play the pure numbers game, then pulled the rug out from under the company by essentially closing off its market, and now Apple finds itself selling 733 MHz Macs in the high-end market while PC clone makers are selling entry-level 1 GHz PCs based on AMD Durons and Intel Celerons? Vengeance is mine, sayeth the Lord. Apple eventually turned to Intel.
Meanwhile, graphics chipset maker S3 found itself in Intel’s crosshairs. Intel coveted S3’s graphics chip business, while S3 coveted Intel’s core logic chipset business. So S3 went on an intellectual property grab and they shocked the world when they outbid AMD, Intel, and others for the old Exponential patents. S3 and Intel eventually made peace, cross-licensing a few patents. S3 never really got serious about getting into the core logic business, while Intel floundered in the graphics chipset business. S3’s biggest enemy in that arena turned out to be itself. In an effort to become profitable, S3 bought Diamond Multimedia, maker of video and sound cards, modems and other electronic doodads. Then S3 sold off its chipset business to VIA, folded its video and sound card business, changed its name to Sonic Blue and left a lot of people scratching their heads.
That’s how VIA ended up with the license it says it has
So VIA’s sitting pretty with Exponential’s intellectual property. S3 cross-licensed some or possibly all of it to Intel, and it’s through this S3 cross-license agreement, inherited when VIA bought the S3’s chip biz, that VIA has claimed the rights to make Intel-compatible chipsets all along. Intel claims this cross-license agreement is null and void.
But here’s the rub. Exponential’s X704 gave high performance, but at the cost of lower efficiency. So you got outrageous clock rates, but little to nothing to show for it. Sound familiar? I thought so. Chances are the X704 and the Pentium IV use some of the same techniques to get the same results. So if that cross-license agreement is null and void, that means VIA can’t make Intel chipsets but it also leaves Intel open to litigation if indeed the Pentium IV uses techniques that Exponential patented back in the mid-’90s. (Details on Exponential’s techniques are hard to come by these days.)
However, Exponential also had some nifty patents regarding 64-bit CPUs. So even if the P4 is free and clear, chances are Merced isn’t.
And you thought VIA just wanted in S3’s graphics chip business so they could embed its video into their core logic…