In line with market expectations, VIA Technologies on April 30 posted losses for the first quarter.

In the fourth quarter of 2002, VIA reported a net loss of NT$701 million, as it claimed losses for its SONICblue investment, an inventory write-off and non-operating business units – its new subsidiaries VIA Optical Solution (VOS) and VIA Network Solution (VNS).

VIA spun off its optical drive chip and networking chip divisions as independent subsidiaries in 2002 as part of its “Canaan Project” to restructure the company.

Though both VOS and VNS are estimated to have turned profitable in the first quarter, VIA posted a loss of NT$646 million due to expenses such as litigation fees for its patent infringement lawsuits against Intel.

Extending for more than one year, the lawsuits came to an end on April 7, when the companies agreed to settle all the pending cases and enter into a 10-year patent cross license. According to the agreement, VIA will also start paying technology licensing fees to Intel, beginning in the second quarter. However, as it has already raised product prices to cover the fees, VIA said that the expense will not greatly affect its second-quarter sales performance.

The company also announced its 2002 results on April 30. Among Taiwan’s three main chipset designers, VIA was the only one to suffer a sales decline in 2002. Meanwhile, affected by its lawsuits with Intel and fierce competition in the chipset market, it also experienced a sharp fall of over 90% in its net profits.

The stiff competition made Silicon Integrated Systems (SiS), though it enjoyed the highest year-on-year sales growth of 57.9% among the three companies, continue to report losses. Comparatively, ALi was the most profitable company in 2002, as it gradually shifted its focus to the higher-margin multimedia chip sector.

Source: Digitimes