Via Enters Low-Cost PC Market with Cyrix III Chip

Available at clock speeds of 500MHz and 533MHz, Via is aiming its chip at the low end of the desktop PC market where computers sell for around US$800 or less. The company will face fierce competition from Intel and Advanced Micro Devices (AMD) who currently rule the roost in the PC chip business.

Via is better known for its chipsets, or collections of semiconductor parts that surround the main processor in a PC. The Cyrix III is based largely on a processor core that Via acquired when it bought National Semiconductor's Cyrix subsidiary last year.

In terms of raw clock speed, the Cyrix III is as speedy as Intel's current fastest Celeron processor. It lags slightly behind AMD, which just today launched a K6-2 processor running at 550MHz. However, clock speed is only one measure of processor performance, and Via is promoting other features which it says will make the Cyrix III a superior product for users looking for a low-cost PC system.

The Cyrix III supports a speedy, 133MHz front side bus -- a conduit that carries data between the processor and other parts of the PC. Intel's current fastest Celeron chips use a 66MHz front side bus. The new Via chip also packs 256K bytes of performance-boosting Level 2 cache memory, and includes AMD's 3DNow instructions, which are designed to boost multimedia performance.

Unlike AMD's chips, the Cyrix III uses the same Socket 370 design as Intel's Celeron chips, which means the new Via chip will fit in the same computer motherboards as Intel's processors. This feature could give Via an important advantage because it will make it easier for PC makers to use Via's chips as an alternative to Intel's, said Mario Morales, senior analyst with IDC in Boston.

However, Via will face several hurdles as the company tries to eke out a business in the value PC market. To call the market a competitive one is an understatement -- "like saying Attila the Hun wasn't a very good humanitarian," according to Nathan Brookwood, principal analyst with research firm Insight 64.

Via may have trouble keeping pace with Intel and AMD in terms of performance, particularly in a market where clock speed is so closely watched by first-time buyers.

"It's going to be tough for Via to come in when feeds and speeds are so crucial at the low end of the market," IDC's Morales said. "What they will have trouble with is keeping up in terms of performance."

Instead, Via will try to distinguish itself from its competitors in terms of price, Morales said. That strategy could work so long as AMD and Intel don't decide to price the company out of the market, analysts said.

"Clearly, if Intel and AMD decided they didn't want another participant, they could lower prices and have a blood bath between them, and Via might get caught in the crossfire," Brookwood at Insight 64 said. The larger companies are unlikely to do that for fear of hurting their own profitability, he added.

Via also isn't a recognized brand among consumers and the company will have a major marketing challenge ahead of it, analysts said. However, naming its chip Cyrix after the National Semiconductor subsidiary may help the Taiwanese vendor gain market visibility more quickly, they added.

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