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                                                                   EXHIBIT 10.5

                              NEGATIVE PLEDGE AGREEMENT

       This Negative Pledge Agreement is made as of August 14, 1998 by and
between Pixelworks, Inc. ("Borrower") and Silicon Valley Bank ("Bank").

       In connection with, among other documents, the Loan and Security
Agreement (the "Loan Documents") being concurrently executed herewith between
Borrower and Bank, Borrower agrees as follows:

       1.     Borrower shall not sell, transfer, assign, mortgage, pledge,
              lease, grant a security interest in, or encumber any of Borrower's
              intellectual property, including, without limitation, the
              following:

              a.     Any and all copyright rights, copyright applications,
                     copyright registrations and like protections in each work
                     or authorship and derivative work thereof, whether
                     published or unpublished and whether or not the same also
                     constitutes a trade secret, now or hereafter existing,
                     created, acquired or held;

              b.     All mask works or similar rights available for the
                     protection of semiconductor chips, now owned or hereafter
                     acquired;

              c.     Any and all trade secrets, and any and all intellectual
                     property rights in computer software and computer software
                     products now or hereafter existing, created, acquired or
                     held;

              d.     Any and all design rights which may be available to
                     Borrower now or hereafter existing, created, acquired or
                     held;

              e.     All patents, patent applications and Re protections
                     including, without limitation, improvements, divisions,
                     continuations, renewals, reissues, extensions and
                     continuations-in-part of the same, including without
                     limitation the patents and patent applications;

              f.     Any trademark and servicemark rights, whether registered or
                     not, applications to register and registrations of the same
                     and like protections, and the entire goodwill of the
                     business of Borrower connected with and symbolized by such
                     trademarks, including without limitation;

              g.     Any and all claims for damages by way of past, present and
                     future infringements of any of the rights included above,
                     with the right, but not


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                     the obligation, to sue for and collect such damages for
                     said use or infringement of the intellectual property
                     rights identified above;

              h.     All licenses or other rights to use any of the Copyrights,
                     Patents, Trademarks or Mask Works, and all license fees and
                     royalties arising from such use to the extent permitted by
                     such license or rights; and

              i.     All amendments, extensions, renewals and extensions of any
                     of the Copyrights, Trademarks, Patents, or Mask Works; and

              j.     All proceeds and products of the foregoing, including
                     without limitation all payments under insurance or any
                     indemnity or warranty payable in respect of any of the
                     foregoing;

       2.     It shall be an event of default under the Loan Documents between
              Borrower and Bank if there is a breach of any term of this
              Negative Pledge Agreement.

       3.     Capitalized terms used but not otherwise defined herein shall have
              the same meaning as in the Loan Documents.

BORROWER:

Pixelworks, Inc.


By: /s/ Allen H. Alley
   ----------------------------------
Name:  Allen H. Alley

Title:  President & CEO


BANK:

SILICON VALLEY BANK


By: /s/ Bruce Helberg
   ----------------------------------
Name:  Bruce Helberg

Title:  Vice President


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