Intel Corp. is using the threat of legal action to slow market acceptance of a DDR (double data rate) chip set developed by Via Technologies Inc. for the Pentium 4 processor, according to a research note released Monday by financial analyst Merrill Lynch & Co. Inc.

Intel officials have reacted strongly to the recent launch of Via's Apollo P4X266 chip set, saying that the chip set is not licensed and hinting at the possibility of legal action. Intel is scheduled to introduce its own DDR chip set for the Pentium 4, the 845/DDR, in the coming months.

"We believe Intel's 845/DDR efforts are behind Via and the company is trying to slow acceptance" of the P4X266, wrote Dan Hyler, Merrill Lynch's head of Asia-Pacific semiconductor research, in the research note. "A remaining battle for the next six months appears to be Intel's legal efforts to thwart Via's momentum and (Intel's) attempts to introduce 845/DDR ahead of schedule."

"To the extent that Intel believes it can deliver performance, volume and price points better than Via, conviction appears to be lacking as the company is now resorting to legal threats to mobo (motherboard) makers to stay away from the P4X266, buying time to ramp 845/DDR," Hyler wrote.

Intel's efforts to slow acceptance of the P4X266 seem at odds with Intel's desire to rapidly increase sales of Pentium 4-based computers, the report said. "Given the weak state of the PC market and Intel's steep ramp of P4 (the Pentium 4), (we) find Intel's actions difficult to understand," Hyler wrote. "It is totally baffling to us that Intel would let those concerns (outweigh its) near-term need to ramp P4 as quickly as possible."

An Intel official declined to comment on the contents of the Merrill Lynch report. "We don't comment on market speculation," said Intel spokeswoman Georgine Lin.

Scheduled to be introduced during the first quarter of 2002, the 845/DDR, is likely to be launched in November instead, sources familiar with Intel's plans said. However, Pentium 4 motherboards based on the 845/DDR will not begin to appear in volume until January 2002, they said.

"This is only speculation," said Lin, referring to reports that the company plans to release the 845/DDR ahead of schedule. "The launch schedule remains the same."

However, an early launch of the 845/DDR would put additional pressure on rival Via, which last week began shipping its own DDR chip set for the Pentium 4, the Apollo P4X266. If the 845/DDR ships sooner than expected, Via could face the risk that major motherboard makers will opt to use Intel's DDR chip set rather than it's own.

A Via official downplayed the significance of timing for the 845/DDR's launch, saying it doesn't change the fact that Via is under pressure to get the chip set into the mainstream PC market. "It doesn't make a huge amount of difference in terms of timing," said Richard Brown, director of marketing at Via. "The critical time is now."

"Intel will ship (the 845/DDR) very aggressively," said Ben Lee, principal semiconductor analyst at Gartner Inc. With the 845/DDR chip set, Intel is shifting its focus for the Pentium 4 from the more expensive RDRAM (Rambus dynamic random access memory) to DDR, he said. "This will threaten Via."

The coming introduction of the 845/DDR also affects Rambus Inc., which develops and licenses technology used in RDRAM. Just six months ago Intel officials were saying they wanted to see RDRAM used in every Pentium 4-based computer. That changed in June, when the company announced plans to offer a Pentium 4 chip set that supports less expensive DDR memory.

"Demand (for RDRAM) will continue to grow, but not very fast," Gartner's Lee said.

Intel, in Santa Clara, California, can be reached at +1-408-987-8080 or http://www.intel.com/. Via Technologies, in Taipei, can be reached at +886-2-2218-5452 or http://www.via.com.tw/.

ITworld.com

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