This week ATI announced that it had completed a deal with Intel to share a broad range of patents relating to integrated graphics chipsets. While the initial announcement lacked specific product details, GameSpot recently spoke with Henry Quan, vice-president of corporate development at ATI, and learned that with this deal signed, the graphics maker can move forward with its plans to release chipsets for Pentium III and Pentium 4 processors as early as this fall. The new ATI chipset will integrate both the Radeon graphics core and a memory controller (often called the "north bridge" chip), which should provide a relatively high-performance and low-cost graphics solution to motherboard makers.

　　The deal also settles a patent dispute started by Real3D before Intel acquired the company for the graphics technology it put into its own Pentium III and Celeron chipsets. Quan told us that the original patent dispute was relatively limited in scope, mainly dealing with texture lighting methods, but the new cross-licensing deal goes far beyond the patents under dispute - giving ATI the rights to produce chipsets for both Pentium III and Pentium 4 systems.

　　Since the chipset will use main system memory for both graphics and CPU tasks, Quan suggested that it would use SDRAM similar to the memory in current Radeon products instead of the Rambus RDRAM currently in Pentium 4 systems. Quan also revealed that the deal doesn't mean we'll see Intel-produced chipsets with Radeon technology. To produce the upcoming chipset, ATI has drawn upon its experience with integrated products primarily sold in very cheap PCs in Asia. Korea-based PC maker TriGem - which produces eMachines PCs in the US - is a notable ATI partner in this area.

　　Moving forward, ATI plans to refresh its chipsets with technology from next-generation graphics products like the R200, which is three to four times faster than the Radeon. A future version of the Radeon-based chipset should also work itself into notebooks. ATI intends to systematically move technology developed for add-in graphics cards into cheaper entertainment devices. Similar to Nvidia's Xbox strategy, this may be a way for the company to prosper while continuing to push the performance envelope. This sort of business strategy is key, as the slow consumer and corporate PC sales have begun to affect PC component makers. ATI just yesterday announced a net profit of US$54.5 million for the first quarter of this year, but this news was tempered by a revenue drop and overall predictions for a slow year.