Sonicblue, Via finalize S3 Graphics joint venture

By Terho Uimonen, InfoWorld |  Development

VIA TECHNOLOGIES AND Sonicblue have finalized the formation of their S3 Graphics joint venture, which will focus on developing integrated chip sets for desktop and notebook PCs, the companies announced Thursday.

The establishment of the joint venture was delayed last year due to regulatory hurdles in Taiwan. Following a restructuring of the joint venture agreement in August of last year, the deal met all conditions mandated by Taiwan authorities in November, a Via spokesman said.

As a result of the completion of the deal, Sonicblue said it will retire the 13 million shares it will receive as initial payment from Via for the transfer of its graphics chip assets to the joint venture. The retirement of the shares will reduce the amount of outstanding Sonicblue common shares from 93 million to 80 million, or approximately 14 percent, the Santa Clara, Calif.-based company said in a statement Thursday. Sonicblue was formerly known as S3 Inc.

Santa Clara, Calif.-based Sonicblue will now focus on its various digital media and consumer devices, ranging from its Rio MP3 players to home networking products and Internet appliances.

While the S3 Graphics joint venture will mainly focus on developing PC chip sets featuring integrated graphics engines, Via will continue to develop additional PC chip sets as well as its line of Cyrix-branded processors.

Separately, Via on Thursday announced that the company expects to post slightly higher-than-expected revenue for the full-year 2000, ended Dec. 31.

According to preliminary estimates, sales for the year reached $940 million, the company spokesman said, edging past the $939 million revenue goal set earlier last year.

Taipei-based Via was widely expected to break the $1 billion mark in revenue for 2000, but the slowdown in PC sales during the latter part of the year led to lower-than-expected sales growth in the last few months of the year.

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