Via-S3 deal would make Intel dead grumpy

Forbes Online is reporting that graphics company S3 is in merger talks, with Taiwanese firm Via the suspected suitor. The magazine reports that Lehman Brothers is currently brokering a possible deal, but the probability is that if Via is interested, it does not want the whole of S3's business, but just its graphics chip business. Yesterday, S3 bought Number Nine, a contractor which supplied its own parts to IBM. However, chip giant Intel might well have something to say if it looks as though Via might snap up the S3 business. It could look at acquiring the S3 chip division itself, if only to prevent Via, about which it is intensely paranoid, from further expanding its ambitious plans to fight Intel. According to the Forbes article, neither S3 nor Via would publicly comment on the rumours. ®