Intel Corp has signed a 10-year cross-licensing deal with graphics chip manufacturer S3 Inc and will purchase warrants to buy S3 shares under undisclosed terms. S3 has also been taken on board as an Intel advanced graphics port (AGP) 4X validation partner. It is thought that Intel is using the agreement to get hold of patents from defunct PowerPC chip maker Exponential Technology Inc, which S3 acquired last year after a fierce bidding war with companies including Intel, Digital Equipment Corp and Advanced Micro Devices Inc (CI No 3,341). Some of the patents relate to X86 emulation in 64bit architecture, useful for Intel in the ongoing development of its IA-64/EPIC architecture Merced CPU. In October, S3 was said to be preparing a lawsuit against Intel over suspected infringement of Exponential patents (CI No 3,519). A spokeswoman for S3 denied that Exponential patents were the sole focus of the deal, saying that Intel had made the decision on the basis of S3’s entire patent portfolio. However, she did confirm that the acquisition of patents played a major strategic role in the business modus operandi of the company and had helped to leverage the deal. S3 hopes that the deal will help it to regain its leadership in the graphics chip arena and will aid expansion into the lucrative set-top box market.
