Question: In early 1998 S3 was a small microchip design firm with
In early 1998, S3 was a small microchip-design firm with a big problem. The company knew that Intel’s patent wall would eventually stall its high-performance graphic-microchip business. S3 hatched a plan to fix the problem. It outbid Intel to acquire the patents of bankrupt microchip maker Exponential Technologies. In doing so, S3 acquired a patent that predated Intel’s. Explain why S3 spent $10 million to purchase a bankrupt firm. What is the implication for the dominance of Intel?
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