HTC gobbles up S3 Graphics

[siopao1984]

---

HTC gobbles up S3 Graphics by VR-Zone.com



Now here's an interesting turn of events, HTC has bought S3 Graphics, from VIA. This has a lot of interesting implications, least not for VIA which might be standing without a graphics partner for its future chipsets. That said, considering that HTC and VIA has common owners; this isn't a very likely outcome.

Very little is known at the moment as to what HTC will be doing with S3 Graphics, but we'd expect it to be business as usual for now. We can't really see the benefits to HTC, at least not short term, as S3 Graphics doesn't really many any product today that would be of any use to HTC in its current products. That said, it's possible that HTC could be making some decent royalty money on some of S3's patents, since as recently as back in April, Nintendo signed a licensing deal with S3 to use its S3TC texture compression technology.

VIA and WTI Investment International, the two owners of S3 graphics will cash in US$300 million on the deal of which VIA will get US$147 million. The press release states that VIA will “retain its graphics capabilities to support the development and sale of its processors and chipsets” which is also suggesting that VIA will be licensing S3 technology from HTC in the future. The deal still needs to pass through the usual regulatory approvals, but the two companies are expecting it to close before the end of the year.

Source: VIA
News Release VIA Technologies Announces Sale of Stake in S3 Graphics - VIA Technologies, Inc.

News Release

VIA Technologies Announces Sale of Stake in S3 Graphics

Taipei, Taiwan, July 6, 2011 - VIA Technologies, Inc. ("VIA") today announced the signing of definitive agreement to sell all of its shareholding in S3 Graphics Co., Ltd. ("S3 Graphics") to HTC Corporation ("HTC"). S3 Graphics is a leading provider of innovative graphics visualization technologies used in PCs, game consoles and, more recently, mobile devices.

VIA acquired S3 Graphics in 2001 with the intention to accelerate integration of graphics capabilities with its processor and chipset products. S3 Graphics became undercapitalized in 2005, and VIA introduced WTI Investment International, Ltd. ("WTI") as a new investor to help fund the operations and R&D initiatives. WTI is a private investment company, in which Cher Wang, Chairman of VIA, is a significant shareholder.

Under terms of the agreement with HTC, total consideration for all outstanding shares of S3 Graphics will be US$300 million. Of which, VIA will receive US$147 million; and WTI will receive US$153 million. VIA will recognize a capital gain of US$ $37 million and paid-in-capital of US$ 115 million in this transaction.

"The transaction would allow VIA to monetize a portion of its rich IP portfolio, yet retain its graphics capabilities to support the development and sale of its processors and chipsets," said Tzu-mu Lin, Senior Vice President and Board Director of VIA. "We wish to thank WTI for its capital contribution to support S3 Graphics since 2005."

The proposed transaction has received approvals from the boards of directors of VIA, WTI, and HTC. Subject to regulatory approvals and other customary conditions, the transaction is expected to close before end of 2011.

About VIA Technologies, Inc.
VIA Technologies, Inc. is the foremost fabless supplier of power efficient x86 processor platforms that are driving system innovation in the PC, client, ultra mobile and embedded markets. Combining energy-saving processors with digital media chipsets and advanced connectivity, multimedia and networking silicon enables a broad spectrum of computing and communication platforms, including its widely acclaimed ultra compact mainboards. Headquartered in Taipei, Taiwan, VIA's global network links the high tech centers of the US, Europe and Asia, and its customer base includes the world's top OEMs and system integrators. www.via.com.tw