Via Technologies will move to knock up to 10 percent off consumer PCs as early as Christmas, with its upcoming KM133 chipset for AMD processors it announces Tuesday. The chipset will include integrated graphics from S3 Graphics, potentially delivering significantly better performance on games and other graphics-intensive applications than has previously been available. The chipset is the first major product resulting from Via's recent acquisition of the majority of S3 Graphics, formerly the core business of S3. By combining S3 Graphics' technology with the part of the chipset called the North Bridge, Via hopes to cut the cost of manufacturing the chipset while potentially eliminating the need for a separate graphics unit within the PC. KM133 is a boost for chipmaker AMD, which until now has lacked a low-cost chipset to complement its value-oriented Duron processor, introduced earlier this year. Via currently makes the only chipset for Athon and Duron chips, the KT133. Manufacturers currently have manufacturing samples, and Via says PCs containing early versions of the chipset should be on sale by Christmas. Production will ramp up in the first quarter of next year. Via claims manufacturers will be able to shave as much as 10 percent off the consumer price of AMD-based systems. The new chipset is part of Taiwan-based Via's stated goal of bringing the PC to the truly mass market -- namely, the billions who can't afford to pay £1,500 for a computer. Via hopes to manufacture parts such as processors and chipsets low-cost enough for manufacturers to sell a PC for less than $500 (about £300). But the mission of producing more and more integrated PC components has met with no success so far. In the most high-profile failure, chip giant Intel cancelled the planned launch of its Timna chip, with graphics integrated directly onto the processor die, following manufacturing problems and difficulties with Rambus memory. A key feature of KM133 is the ability to automatically switch off its graphics capabilities if the user or manufacturer chooses to add a separate high-end graphics card. This means manufacturers will have the option of using KM133 for their entire range of AMD-based PCs, instead of having to purchase separate chipsets for high-end and value PC lines. KM133 will, however, be slightly more expensive than the non-integrated KT133. "The [difference] in price will not be that large," said an S3 Graphics spokesman. "OEMs will have to make the decision of saving $5 to $10 over having the flexibility of being able to decide at the last minute, if at all, whether to populate their PCs with a discrete graphics solution." S3 Graphics was recently separated from the rest of the business of parent S3, which has shifted into the Internet appliance and consumer electronics market with products such as the Rio digital music player. S3 has also undergone a name change to Sonicblue. In the mean time, S3 Graphics is now in the process of becoming a joint venture between Sonicblue and Via, with Via owning a majority stake and having tight control over the graphics operation. The joint-venture deal is expected to conclude by 3 January. Via has not shied away from making acquisitions -- often of troubled companies -- in its pursuit of the cheap-PC goal. Via's Centaur operation, for example, now manufactures ultra-low-cost x86 processors under the Cyrix brand name, acquired from National Semiconductor. Industry observers believe Via may even be planning to use the various acquired parts to manufacture its own low-cost integrated processor. As for S3 Graphics, the company has admittedly taken a drubbing in the competitive PC graphics market and will bow out of discrete graphics cards market for now. "We're going to take a rest," says the S3 Graphics spokesman. "We'll be back with a new product in 12 to 18 months' time." See Chips Central for daily hardware news, including interactive roadmaps for AMD, Intel and Transmeta. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read other letters.