Chinese Chip-Producer Zhaoxin and Via Technologies Strengthen Ties

Via Technologies and Shanghai Zhaoxin Semiconductor Co., a joint venture between Via and Shanghai Municipal Government, have announced that they have entered into an agreement under which Via will transfer some of its IP to Zhaoxin. The intellectual property will enable Zhaoxin to continue the development of its x86 PC platforms. 

Once a successful supplier of chipsets and low-power CPUs, Via Technologies refocused from PC products to various emerging applications for industrial, transportation, and smart city markets in recent years. Yet Via Group did not abandon PCs completely as it still has some low-end CPUs and chipsets and also holds a 14.75% stake in Shanghai Zhaoxin, a developer of CPUs and chipsets.  

Because Via Group has an x86 license it obtained back in 1999 (through its acquisitions of Cyrix and Centaur Technology) and co-owns Zhaoxin, the latter can develop x86 CPUs. Originally, Zhaoxin designed CPUs based on the Via Isaiah microarchitecture, but eventually, it introduced its own microarchitectures (which are likely evolutions of the Isaiah). Apparently, now Zhaxin needs more intellectual property from Via Group to keep developing its platforms. According to Via Technologies's filings with the Taiwan Stock Exchange, the company plans to transfer certain CPU and chipsets-related IP to Zhaoxin. The transaction does not include patents, and Via will be able to keep using its IP going forward.   

"The company and its 100% owned subsidiaries Viabase and Viatech sell some chipset products related intellectual property rights (excluding patent rights) to Shanghai Zhaoxin Semiconductor in which Via has indirect shareholding of 14.75%," a statement by Via Technologies reads. […] In addition, the subsidiary Viabase sold some CPU products related intellectual property rights (excluding patent rights) to Shanghai Zhaoxin Semiconductor." 

Neither Via Technologies nor Zhaoxin disclosed which IP is to be transferred, keeping in mind that Zhaoxin already has access to Via's most advanced Isaiah x86 microarchitecture. Typically, under the terms of agreement with Intel, x86 licensees (which includes such companies as AMD and Via) cannot sell the license but can enable their subsidiaries to develop and produce x86 processors. Meanwhile, it is possible to obtain an x86 license by acquiring one of the existing x86 licensees. That said, while Via Technologies will indeed provide certain x86-related IP to its subsidiaries, this is not a transfer of an x86 license. As for chipset technologies, Zhaoxin has used graphics cores developed by Via's subsidiary S3 Graphics for years.

"After the transaction, the company and its subsidiaries can still continue their current business," the statement added. "The transaction is a kind of asset activation, which can increase revenue without affecting future business development." 

Via Group will receive payments from Zhaoxin in two installments in 2021. Total proceedings are expected to be about $197 million after all the taxes are paid. 

Sources: Taiwan Stock Exchange, DigiTimes, Economic Daily