Q3 2001 Industry Update

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Chipsets and Motherboards

VIA

VIA seems to be living the old Chinese curse of living in interesting times. After having an incredible run of success in 2000, taking away a significant share of the market from Intel, their 2001 success rate is pretty dismal. Since releasing the KT266 earlier this year, few consumers or manufacturers have been anxious to use it, since the KT133A provides very similar performance for a lower overall cost. Several well-publicized ‘glitches’ in their chipsets solidified their reputation as a ‘buggy’ chipset maker, even though much of that reputation is not well founded.

VIA began to fight back by trying to offer incentives, and then eventually resorted to some ‘bully’ tactics by threatening to withhold incentives for anyone using chipsets from rival SiS. In an attempt to gain an edge in the market, VIA released their P4X 266 chipset in mid-August, and while most motherboard makers had designed products around it, few were willing to release any onto the market. The reason, of course, is that Intel refused to license VIA for the P4 bus, and used legal threats and i845 chipset allocations as leverage against the manufacturers. VIA offered to carry the legal burdens of anyone using their chipset, but for the larger manufacturers this simply was not enough. Intel is not a company to be trifled with, in the estimation of most.

While many pundits were saying that Intel would ‘have’ to give VIA a license, Intel responded by suing VIA for patent infringement in early September. VIA quickly followed with a counter-suit alleging that Intel had violated VIA patents (acquired in the buyout of Centaur) with the P4 and i845 chipset. Intel lawyers are not easily upstaged, however, and Intel counter-counter-sued, alleging patent violations in the C3 processor, amongst other things. VIA, of course, is expected to counter once again. The game is expected to last for some time, but currently it appears to be advantage Intel.

In an attempt to stem the loss of market share to SiS, and probably as a pre-emptive strike against nVidia, VIA released an updated KT266 chipset that they called the KT266A. By improving the memory timings in the North Bridge, VIA managed to score a nice coup as they achieved benchmark results equaling the much anticipated nForce chipset several weeks before the nForce results were published. Motherboards using this chipset are just now hitting the market, so it is unknown what effect it might have on VIA’s sales or sales of Athlon systems in general. With the increased competition, not only from Intel, but from SiS and nVidia, VIA should not expect things to be as rosy in 2002 as they were in 2000, even if the market picks up significantly. For the consumer, however, this seems to be yet another benefit of the ‘new age’ of competitiveness in the tech industry.

Intel

On September 10, Intel released their i845 chipset, but few publications even mentioned it, much less reviewed it. It seems that Intel has a fairly major PR problem on their hands with regards to this chipset. Even though it was intended to be a low-end chipset for the P4, most have compared it to the higher-end Athlon chipsets and reviewed it that way. John Howland provided two evaluations of the chipset (Here and here), comparing it to what it is intended to replace (PIII and i815 chipset), but few seem to even want to view it in this way.

Several motherboard makers did tell me that they had anticipated a large demand, mostly based upon Intel projections, so they built a number of boards and readied some campaigns to promote the products. Unfortunately, the events of September 11 put a major crimp in these plans, and now manufacturers are very worried that they may be stuck with a large inventory of product is the sales never take off. And with rumors of an impending release of an Intel DDR capable chipset, the problem becomes a difficult one to solve.

November is the date being thrown around for a Brookdale DDR chipset release, and discussions with several motherboard makers seem to verify that there is at least an even chance that this will occur. The A2 stepping of the chipset, which manufacturers used to design their motherboards with had DDR support enabled. This allowed the motherboard makers to ensure their products worked with both SDRAM and DDR, but the A3 (production stepping) disabled DDR support. There have been some rumors that the next stepping of the chipset is already shipping to manufacturers, with DDR support enabled, however Intel officially maintains that the official release will not be until next year.

Other Manufacturers

In an effort to combat the VIA attacks on their market with the KT266A, SiS sent out some performance enhancement tweaks for their 735 chipset. While the 735 was long considered the top performing Athlon DDR chipset, few manufacturers actually utilized it on products. Part of the reason for this is that SiS is an unknown right now in terms of their ability to deliver. The PCChips group has been the number one buyer of SiS chipsets for several years, making them the preferred customer. In the event that demand increases, the Tier one manufacturers (ASUS, etc.) would not like to be in a position of taking whatever is left over.

Now that SiS has their own fab running, production capacity and shipments are increasing as evidenced by their improved revenues for this year. This should get even better, as they will be introducing their P4 DDR chipset any day now. There are rumors that this chipset is as much as 30% faster than the i850 chipset in certain applications. The question is whether manufacturers can get past the perceived problems of production capacity and allocations that they had with the 735 chipset. Of course, there were alternative choices for Athlon DDR chipsets, but with the P4, the only DDR alternative today is the unlicensed VIA chipset. This could be a very good year for SiS.

ALi is also scheduled to begin volume production of their Aladdin-P4 chipset this month, but I have heard little news about it. The perceived problems that haunt SiS are not present, however they are not the most highly regarded of the chipset makers due to some stability issues in past products. It seems that without the Brookdale DDR chipset, the motherboard makers are likely to be somewhat hesitant to jump in with both feet until they know which chipset is preferred in the market.

NVidia has done an extremely good job in building anticipation for their nForce chipset, as many in the hobbyist community have claimed they are waiting for this product before upgrading. Recent reviews of pre-production motherboards indicate that it performs on par with the KT266A, which is a significant achievement for a first-time effort. What remains to be seen, however, is how stable and compatible this chipset is when it hits the streets. There are some indications that problems may have already been identified, as the official release date moved from August to October. It is possible, however, that the date was moved to coincide with the release of the Athlon XP.

Several manufacturers surveyed indicated that they were ‘looking’ at using the nForce chipset, but there did not seem to be much excitement at this level. Maintaining multiple product lines is expensive, and the current market is not conducive to a great deal of experimenting. Had claimed early in the year that they would have an nForce based product when the chipset was introduced, and likely ASUS and Gigabyte will have one as well. Beyond that, expect only a few smaller manufacturers to initially offer a product with the chipset unless and until the market acceptance and risks are more well known.


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