S3 to Collect $42 Million From UMC in Patent License Deal

S3 will receive $42 million from United Microelectronics Corporation under a patent license agreement announced today. UMC licenses 29 S3 patents spanning multimedia products and chip manufacturing technology, covering what the UMC Group builds. As part of the deal, S3 is also releasing UMC from contingencies attached to an earlier sale of United Semiconductor Corporation stock.

The money is spread across the license term and hinges on certain USC milestones, so this is no lump sum. For background: USC is the foundry joint venture UMC formed with S3 and Alliance Semiconductor in 1995, with UMC as its major shareholder, and its eight-inch wafer output has been climbing for S3 and other chip companies since its first year.