Computer chipmakers are feeling the effects of the global slowdown in the information technology industry. According to recent IDC research, the worldwide PC market was stagnant in the second quarter of 2001 with a steady decline forecast for the balance of the year.
Companies with large investments in plant and machinery are under pressure from competitors that have taken the "virtual" route to market and who are reacting faster to changes in customer demand.
One such company is VIA Technologies, which has recently signed Rectron as a distributor in SA. VIA is purely an ideas company. It does not have a single fabrication plant. This is why it has been dubbed a microchip "fabless" design house.
In just two years VIA has secured a 40% share of the global chipset market and - significantly - is trading profitably. VIA posted a new record sales figure for March 2001 with an increase of 56% over March 2000, showing that it is capable of maintaining its momentum as one of the fastest growing companies in the semi-conductor industry.
Tim Handley, international marketing specialist at VIA Technologies in SA, says VIA`s success is not simply the result of its `fabless` status.
"Our approach to the PC market is also different," he says. "Mainstream semiconductor vendors have to carry the massive overhead of developing ever bigger and better - and more expensive - components. This strategy has resulted in power and functionality that often exceeds the general PC users` needs by a considerable margin.
"VIA`s strategy is to create the chipset technologies that address the needs of the low- to mid-range PC user. As an ideas company, we want to establish a platform on which our OEM PC makers can build low cost products that serve the needs of the broadest market possible."
Handley says this strategy was devised by VIA`s president Wen-Chi Chen.
"His idea of low cost computing for the masses comes in the form of the `information PC`. Comprising mainly VIA components, this PC is a low-cost version of the more expensive PCs produced by VIA`s opposition. "Yet it is capable of handling many of the tasks that the higher-end machines do, including Web surfing, e-mail, digital photography, word processing and spreadsheets."
Handley stresses that VIA is not pushing obsolete technology. "On the contrary, to produce a low cost machine capable of the functionality that VIA is able to build into a PC requires up-to-date expertise and market awareness. For example, VIA`s new C3 processor is socket-370 compatible and operates at speeds of up to 800MHz. The processor features the world`s smallest x86 processor die size of only 52mm2 to optimise power consumption," he says.
"Additional features include up to 192KB of full speed cache, 100/133MHz Front Side Bus support, as well as MMX and 3DNow! instructions for enhanced multimedia and Internet performance."
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