HTC buys graphics firm S3 for $300M, gets patent trove

HTC said it purchased graphics firm S3 Graphics Co. for $300 million, a move that will bolster the smartphone maker's patent position via S3's portfolio of 235 patents, many of which cover graphics visualization and compression technologies.

The Taiwanese smartphone maker bought S3 from chipmaker Via Technologies, which acquired S3 in 2001. Under the terms of the deal, Via will receive $147 million; and WTI Investment International, a major S3 shareholder in which HTC and Via Chairwoman Cher Wang has a large stake, will get $153 million.

"S3 Graphics' patents are highly complementary to HTC's existing innovations and multimedia capabilities," HTC CEO Peter Chou said, according to IDG News Service. The patents S3 holds took on special significance last week after a U.S. International Trade Commission judge ruled that Apple (NASDAQ:AAPL) infringed on some of the claims in two S3 patents. Apple and HTC have been locked in patent litigation since last year.

This is the latest HTC acquisition that is intended to strengthen its position in the graphics, services and multimedia fields. In February, HTC invested $48.6 million in content delivery platform provider Saffron Digital, which powers HTC's Watch video service. Around that time HTC also acquired a $40 million stake in cloud gaming firm OnLive.

In other HTC news, the company posted its second-quarter earnings, and said its net profit more than doubled to $608 million, up from $299 million in the year-ago period. Sales also exceeded expectations, coming in at $4.32 billion.

For more:
- see this release
- see this IDG News Service article
- see this Bloomberg article
- see this Reuters article

Related Articles:
HTC sees Q2 sales surge, banks on Sensation sales
HTC confident it can double smartphone sales in 2011
HTC opens Sense UI to developers
HTC will launch multiple tablets in 2011
HTC debuts Flyer Android tablet, launches Facebook integrated phones
HTC boosts content efforts via Saffron Digital investment

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