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HTC buys control of S3 from VIA just after win over Apple

updated 10:15 am EDT, Wed July 6, 2011

HTC buys S3 from VIA for 300m

HTC followed up strong results on Wednesday by buying out VIA's stake in S3 Graphics. The deal, worth $300 million, effectively gives control of the graphics chipset maker. About $147 million will go directly to VIA, while the remaining $153 million will go to S3's investor WTI.

VIA saw the move as a way of turning its patent portfolio into cash while still having graphics options for its processors and system chipsets. The firm pockets $37 million in capital gains and a paid-in-capital of $115 million. Closure is expected by the end of the year.

HTC's aims in the buyout aren't completely clear but may only be incidentally related to the graphics themselves. As a multi-OS phone and tablet maker, HTC doesn't have the freedom to customize its processors the way Apple might. S3 is known for low-power video but has rarely been known for performance, having lost much of its clout in the early days of 3D after the ViRGE failed to take on 3dfx's Voodoo and Rendition's Verité line in the mid-to-late 1990s.

The Taiwan firm may instead be taking responsibility of S3 to head off patent challenges. S3 just recently won ITC disputes on two patents versus Apple and, barring appeal, now has influence over the iPhone maker. HTC is currently facing multiple Apple lawsuits and could use S3 as leverage.



By Electronista Staff
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