S3 (Multimedia semi's place 2be) Message Board

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Technology Stocks : S3 (Multimedia semi's place 2be)

SIII 0.0001000

0.0%

May 12 5:00 PM EST

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To: stockroach who wrote (7624)	1/29/1997 6:18:00 PM
From: Matthew Rome	of 9477

Greg, Auburn will not be just a "High-End" chip. It will be targeted at Klamath, and is designed to be a next generation "low cost/high performance", Virge/VX type solution with 2D part from CHPS and patented 3D technology from Real3d(Lockheed). Intel is no doubt "investing" in this technology to spur the adoption of P6/Klamath(their 97/98 bread and butter), and to start to kill off their lower-end P5/MMX chips in time for Q4 97. S3 and others may continue to scramble for the P5/MMX OEM chips and DIMD type add-ons, but this is where margins will erode fast compared to the Klamath and the "real" high-end solutions from 3DLabs, SGI and others. I'm not saying that S3 won't compete with their own Klamath/AGP chip and actually beat Intel to market. But do not for one second fool yourself that Intel/Auburn is not a direct competitor to S3. Yes there are thousands of one/two product companies out there, some evolve, survive and prosper and many are obsolesced and crushed. S3 is currently on the absolute top of their game and product cycle and the market will continue to price this stock at its current level until it "proves" (through earnings and diversification) which path it will take. As far as the large block trades, I wouldn't get my hopes up. They could just as easily being large Shorts covering (3.5m short interest) or MM's trading shares. Obviously niether trade moved the stock up these past two days, so I'm not too excited. Looks like SIII will be testing 16 again long before it sees $20.

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