Introduction

While discretes are always going to be needed and will never go away, the sales for them, in units, is flat to low growth (see MarketWatch Q1'07). Intel didn't invent the integrated graphics control (IGC) which has evolved into the integrated graphics processor (IGP), SiS did, but Intel sure has made the most from it and of it.

In June 1996 SiS introduced the SiS5110 Pentium notebook chipset, the first that integrated LCD, graphics chips, and PCMCIA into a core-logic chipset. In late April 1999 Intel introduced the 810 "Whitney" chipset with integrated graphics.

Now Intel is being chased by not only SiS and VIA, but AMD and Nvidia as well. AMD is the leader right now in terms of performance and features, and we expect the next IGP from Nvidia to raise the bar even higher. It had to be expected when 70% of the market is in a particular category, strong competition can be counted on.

SIS sees Intel as an ally—at least that's what they're saying in public

It's important to go to Taipei at least once a year to try and figure out what's going on with the country's chipset and graphics manufacturers. If you figured it out be sure to let us know because we already lost our diagrams.

Basically it goes something like this: XGI acquired Trident and UMC acquired SIS and then ATI acquired XGI.

This is another case of roving bands of graphics engineers, by the way. We first documented this phenomenon a few years ago as bands of engineers were traded up and down highway 101 in Silicon Valley. Some moved from SGI to Nvidia and others moved from S3 to ATI, and some 3dfx engineers wound up at Nvidia. There was also the Florida-based tribe that was split between Intel and ATI. Basically, it seems graphics engineers are commodities to be traded like Beanie Babies.

So, to get back to the current trades, thanks to some engineers from Trident and others from XGI, SiS has returned to graphics. At Computex the company demonstrated its Mirage 3, integrated graphics for users who want mainstream Vista support. SiS's graphics supports H/W DX 9.0 and includes the company's Real Video to support the Aero 3D interface including 3D animation, transparency, and desktop composition.

The Mirage 3+ brings Advanced Power Management technology, which comes into play when 3D acceleration is not necessary. As a result, the company says its graphics offers 3D performance coupled with power savings.

SIS professes to be quite comfortable with the success of Intel and the company's new chipsets because SiS has come to benefit from Intel's "the-enemy-of-my-enemy-can-sit-next-to-me" philosophy.

Since companies like Dell insist on dual suppliers for their components we are told that Intel recommends SiS.

At Computex, SiS is rolling out its SiS67x line. The company says there are over 40 projects in the works among computer makers and, they say, this is simply the first ramp for the new products.

Coming up for 2008, the company will introduce the SiS680 series for Intel's Penryn processors. The Penryn, if you'll remember, and we don't we always have to look this stuff up, is the successor to the Conroe family. It's a die shrink down to 45-nm and will include new SSE instructions and more L2 cache.

SiS plans five different variants on the 680 to fit into three market segments: performance, mainstream and entry level. At the same time, SiS wll introduce its new SiS Mirage 4 graphics core. It's HDCP-compliant for Blu-ray and HD DVD, and it supports DirectX 10 with hardware H.264 and VC-1 acceleration.

SiS claims to be tracking Intel closely so that as Intel introduces new processors or chipsets in the market, SiS can counter about a month later in order to keep its status as a second source supplier.

There's more to PC life than PCs and SiS also demonstrated products for the embedded markets and servers.

SiS says their new parts are just starting to ramp. The company says they're still selling plenty of their SiS64x line as well. However, a look at the company's financials shows them to be down an average of 55% per month compared to last year. SiS can live on the edge; they've been doing it for years. The execs we talked to were optimistic. They expect to see the company's fortunes picking up in the second half of the year and carry on through at least the first part of 2008. That's assuming they can efficiently exploit the holes Intel is leaving for them.