Analyst Jon Peddie of Tiburon-based Jon Peddie Research said the ITC decision between United Microelectronics Corp. (UMC) and Silicon Integrated Systems Corp. (SiS) would only benefit Intel Corp., and possibly, Advanced Micro Devices Inc.

"From where we sit, this looks like a lose-lose-lose situation for everyone," Peddie said in a statement. "It's the injunction that stole Christmas."

Last year, the ITC voted to investigate whether SiS violated two patents owned by silicon foundry giant UMC. UMC also claims SiS recruited some of UMC's engineers and infringed its intellectual properties in order to run SiS's wafer fab. The 200-mm wafer facility, located on the island, is the only one that SiS now operates (see Feb. 28, 2001 story ).

In the ITC complaint, UMC this week claimed it won the case (see Oct. 9 story ). In a Notice of Final Determination and Issuance of Limited Exclusion Order issued in Washington on Oct. 7, the ITC "ruled that SiS is manufacturing products using a patented UMC process in violation of United States law," according to UMC of Hsinchu.

"The Limited Exclusion Order directs the U.S. Customs Service to bar the entry of all SiS products made with the infringing process into the United States," according to UMC. "Infringing SiS chipsets and graphics chips, and all motherboards containing infringing SiS products, are to be barred from importation into the United States immediately following the law-mandated 60-day period for Presidential review of the decision," the company said.

SiS said it partially disagreed with the determination, and has adopted a new process to manufacture redesigned products for import to the U.S. SiS claims there will be no impact on customer supplies and imports to the U.S.

Still, SiS' chip sets and "SiS-based motherboards are not coming to the U.S for at least 60 days, plus there are already shipments backed up due to the West Coast port shut down," according to Jon Peddie Research. "All that means no SiS-based motherboards or chips will touch U.S. distributors' warehouses until maybe next March!''

Even SiS' competitors are worried. "You'd think this would delight ATI, Nvidia, VIA and others, but it doesn't," according to Jon Peddie Research. "Instead it worries them because the SiS-based motherboard suppliers, with built up inventory, hoping for a end of year sales pop, are now likely to start dumping to get rid of inventory and a potential legal problem. And where will they dump? Everywhere except the U.S. - East and Western Europe, Asia, India and the Mid-East, South America, Canada, Mexico, and Africa," the firm said.

And who will benefit from the verdict? "In the meantime, who's left to supply motherboards? Intel's OEMs," the research firm said.

"The other potential accidental beneficiary to this injunction is AMD. If SiS-based motherboards are dumped, they will need processors. AMD may find an opportunity to empty out their inventory of older K7s, something that has been worrying the company and its investors with the introduction of the K8 coming up."