Faroudja Inc. Announces End of Exclusivity Provisions with S3 Inc.

Strategic Insights -

Faroudja Inc., a leading developer of video processing technology, has announced that the exclusivity provisions of its license with S3 Inc. will end at the close of the first quarter of this year. This move marks a significant shift in Faroudja's business strategy, allowing the company to license its technology to other companies in the PC market. With over 50 patents to its name, Faroudja is recognized for its superior video processing technology, which improves picture quality dramatically by increasing display lines, bandwidth, and correcting noise, color, and motion errors.

Key Takeaways:

  • The exclusivity provisions of Faroudja's license with S3 Inc. will end on March 31, 1998, allowing Faroudja to license its technology to other companies.
  • S3 Inc. has informed Faroudja that it will not make the necessary payments to maintain its exclusive license rights, which would have represented approximately 23 percent of Faroudja's revenues for the first quarter of 1998.
  • Faroudja's new strategy encompasses licensing its technology to other companies, selling chipsets to PC manufacturers for multimedia PCs and PC/TV convergence products, and selling chipsets to PC board manufacturers.
  • The company holds more than 50 patents for its video processing technology, which is recognized for its superior performance.
  • Faroudja's products are designed to bring HDTV-quality images to the digital broadcast, display, PC/TV convergence, and home theater markets.
  • Michael Moone, President and CEO of Faroudja, stated that the company's strategy now includes licensing additional companies and expanding its product offerings.

Statistics:

  • 23 percent: The percentage of Faroudja's revenues that would have been represented by license fees from S3 Inc. in the first quarter of 1998.
  • April 1, 1998: The date of the announcement by Faroudja Inc. regarding the end of exclusivity provisions with S3 Inc.
  • March 31, 1998: The date marking the end of the exclusivity provisions with S3 Inc.

Sources:

  • Business Wire, April 1, 1998
  • Form 10-K for the year ended Dec. 31, 1997 filed with the Securities and Exchange Commission