There may be some question as to why HTC would want to acquire S3 graphics.
However, since S3 has hit Apple with yet a patent infringement lawsuit, we can safely assume that the acquisition was mainly about S3's patent base. S3 claims that Apple has been violating two of its patents, a VGA controller patent as well as well as a technology that describes "Block- and band-oriented traversal in three-dimensional triangle rendering".
According to S3, all major Apple hardware products are affected by the infringement, including the iPhone, iPad, iPod Touch and desktop and notebook computers such as the MacBook series as well as the iMac. S3 is asking for a permanent injunction against Apple that would prevent the company from further patent infringement. It is also asking for "adequate" compensation, triple damages and the usual array of reimbursement of legal fees.
It is yet another strategic move in an increasingly complex patent battle that will only get more difficult as the contenders bolster their patent portfolio. By itself, S3 is largely irrelevant today.