HTC acquires S3 Graphics for $300 million

The thriving smartphone maker HTC has acquired a graphics chip company that at one point in the 1990s was right up there with Nvidia and ATI. TechCrunch reports that HTC will acquire the S3 Graphics division of Via Technologies. HTC will buy all of the shares of the company for $300 million. Via will get $147 million of the money while another investor in S3 Graphics, WTI Investment International, will receive $153 million. HTC's co-founder Cher Wang is also the chairman of VIA Technologies and is a large shareholder in WTI.

Founded in 1989 in the Bay Area of California, S3 Graphics started out by making 2D graphics cards for PCs and was one of the leading companies in this market. In the late 1990's during the 3D graphics boom, S3 Graphics released the ViRGE graphics chips. However the chips were not as fast as competing PC graphics cards with chips from Nvidia, ATI and the now shut down 3Dfx. S3 Graphics was later sold to Via Techologies for $323 million in 2001. The company has continued to release new PC graphics chips under the Chrome branding but it never gained as much market share as Nvidia, AMD (the new owners of ATI) or Intel.

HTC will not only get access to a number of patents and technology related to graphics it will also gain some patents that might help it in its legal fight against Apple. In 2010, HTC filed a lawsuit against Apple claiming it had violated its patents. Recently, S3 Graphics won its own court battle against Apple as a court agreed that Apple had violated two of S3 Graphics' patents relating to "systems and methods for compressing images" and "image data formats".

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