Heavy, VIA sells x86 technology to Shanghai Zhaoxin, however, Zhaoxin’s future prospects are hidden

According to Taiwanese technology media DIGITIMES, on the evening of October 26, VIA Electronics suddenly announced a major information briefing session, chaired by VIA Chairman Chen Wenqi.

A total of $257 million in transaction value

At the briefing, VIA Electronics announced that VIABASE and VIATECH, 100%-owned subsidiaries of VIA, will sell some intellectual property rights such as technologies and materials related to chipset products to Shanghai Zhaoxin, which VIA indirectly holds a total of 14.75% of the shares. The transaction amount is approximately $138 million. At the same time, VIABASE will also sell some intellectual property rights such as processor-related technologies and materials to Shanghai Zhaoxin, with a transaction amount of US$118 million.

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The transaction involved a total amount of US$257 million.

VIA emphasized that this transaction is an asset activation, which can increase income and will not affect future business development. After the transaction is completed, VIA and its subsidiaries can still continue their current business.

Promoting the reason for the transaction leads to speculation

Promoting this kind of transaction at this point in time is inevitably considered by the outside world to be related to the de-beautification policy/industrial environment in mainland China. Chen Wenqi did not directly respond to this. He only said that the market has changed a lot and is still under observation.

In addition, DIGITIMES also stated that the Taiwan Ministry of Economic Affairs plans to revise the laws and regulations related to industry management recently to avoid the outflow of advanced technology to mainland China. VIA was eager to move forward with the deal, thought it might be trying to get ahead of the amendments. In this regard, VIA said that this transaction does not require prior application, but only needs to be reported.

People in the PC industry said that the VIA x86 processor platform has not developed smoothly in recent years, and it basically has no sense of existence in the market. VIA has also fully moved to the AIoT field. Perhaps because of this, VIA hopes to sell intellectual property rights such as x86 processors, chipset technology, and data to Zhaoxin. Such a transaction should indeed not affect the future business of VIA and its subsidiaries. While making profits, it will also help develop mainland China. market.

Zhaoxin’s future development has hidden worries

According to DIGITIMES data, Shanghai Zhaoxin was established in 2013 by VIA and Shanghai Lianhe Investment Co., Ltd., a subsidiary of Shanghai State-owned Assets Supervision and Administration Commission. Currently, VIA’s stake has dropped to 14.75%. Zhaoxin focuses on the research and development of x86 processors, and the technology license comes from VIA, which has not made any profit so far.

The report also mentioned that the future development of Shanghai Zhaoxin may be limited by American technology. Zhaoxin’s x86 license comes from VIA, which has a cross-licensing agreement with Intel.

With the gradual progress of the Sino-US trade war, Tianjin Haiguang was included in the “entity list” in 2019. Tianjin Haiguang has obtained AMD’s x86 authorization, and its business is mainly server.

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