HTC to Acquire Chip Firm S3 Graphics
High Tech Computer (HTC) will acquire chip Firm S3 Graphics for US$300 million, reports PCWorld. This decision of the Smartphone vendor is being seen by many experts as a move to strengthen its patent portfolio.
The purchase will allow HTC to get S3 Graphics’ portfolio of 235 patents. The company will also acquire pending patent applications of S3 Graphics related to several graphics visualization technologies.
According to HTC CEO Peter Chou, S3 Graphics’ patents are “highly complementary to HTC’s existing innovations and multimedia capabilities.”
“In the smartphone and tablet business, there are a lot of patent lawsuits. S3 has a lot of patents, and HTC needs more bargaining power in the smartphone business,” said BNP Paribas analyst Laura Chen.
Analysts are of the opinion that the acquisition will let HTC protect itself from patent litigation in future. Last year, HTC was sued by Apple for infringing on 20 Apple patents. Apple said that these patents were related to iPhone’s user interface, underlying architecture and hardware.
Currently, S3 Graphics is owned by Via Technologies and WTI Investment International.
Via Technologies is based in Taiwanese. It sells x86 processors in competition with Intel.
HTC chairperson Cher Wang also serves as the chairperson of Via Technologies.
After signing of the deal, the ownership of S3 Graphics’ patents will change. “HTC will provide a perpetual license of the S3 patents to Via,” said HTC CFO Winston Yung.
The deal has been approved by the boards of directors of HTC and Via. It is expected to be closed by the end of the year depending on approvals by regulatory bodies and other customary conditions.