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As Taiwan personal computer chip-set suppliers ramp up production of their next-generation devices, OEMs around the world could discover some real bargains-if they are fortunate enough to obtain sufficient quantities of the chip sets.
In fact, Acer Laboratories Inc. (ALI), Silicon Integrated Systems Corp. (SIS), United Microelectronics Corp. (UMC), and other Taiwan chip-set suppliers are all scrambling to keep up with the huge OEM demand that has resulted both from strong sales of PCs worldwide and ongoing constraints in manufacturing capacity.
Taiwan chip-set makers are also under extreme pressure from some U.S. companies, especially Intel Corp. Indeed, since Intel has launched a renewed assault on the chip-set market, the Santa Clara, Calif.-based microprocessor maker has been several steps ahead of its competitors.
Intel has been aggressively marketing its Pentium-based chip sets for some time, yet is already sampling a P-6-based product line. This will challenge non-Intel chip-set vendors to remain competitive and test their ability to stay on the leading edge, analysts and vendors agree.
"The chip-set market has always been competitive," says Wen-Chi Chen, president and chief executive at Via Technologies Inc., a Fremont, Calif., chip-set supplier. "The business has become even more competitive with Intel's entry into the market," he added.
In fact, Intel dominated the chip-set market in 1994, accounting for 66% of sales in the 64-bit (or Pentium-class) core logic market. Its nearest competitor, Opti Inc., accounted for just 10% of sales, according to Mercury Research, a Scottsdale, Ariz.-based market research firm.
SIS came in third in the market, accounting for 7% of sales, according to Mercury Research, while VLSI Technology Inc. and Taiwan's UMC each accounted for a 5% share of sales. Acer Labs and Via had 4% and 3% market shares, respectively, the research firm added.