Intel Exits Graphics-Chip Market To Focus On Integrated
Chips
NEW YORK -- Semiconductor giant Intel Corp. Thursday acknowledged it has
decided to leave the market for stand-alone graphics chips after just two years
in the business.
Intel confirmed a CNET report that Intel (INTC) has decided to cancel its 752
and 754 graphics chips for personal computers. Instead, Intel with its 810 chip
will focus on the nascent market for integrated chips combining a standard PC
chipset with a graphics chip.
Intel entered the graphics chip market two years ago with its purchase of Chips
& Technologies, but it has had limited success with its first stand-alone i740
chip.
Intel will release the 810e later this year. The 810 chip is aimed at low-cost
computers, while the 810e will be aimed at mainstream, or mid-stream,
computers. He said Intel continues to see the high-end computer market as
supporting separate logic and graphics chips, explaining that Intel won't move
into the high-end graphics chip area.
Ray Sharma, analyst with CS First Boston in Toronto, noted last month that
Intel has been having trouble with its 810 graphics chips and that shipments
could be delayed by several weeks. Sharma was expecting Intel to ship 12
million graphics chips this year. Intel shipped about one million in the first
quarter and should ship less than one million in the second quarter, Sharma
said. Given that Intel won't likely be able to ship 10 million in the second half of
the year, the shortfall bodes well for other suppliers of integrated graphic chips,
Sharma said, including ATI Technologies Inc. (ATYT).
Indeed, Intel's retreat from the graphics-chip business should ease worries for
the Ontario-based maker of graphics-accelerator chips. Although Intel had little
of the stand-alone graphics chip market, investors had always worried that Intel
might someday put its muscle behind an effort to dominate the graphics
market. Still, ATI won't gain much more market share in that area on Intel's
departure alone, said Susan Street, analyst with Sprott Securities Inc. in
Toronto.
ATI is left with two main competitors in the stand-alone market - Nvidia Corp.
(NVDA) and S3 Inc. (SIII), Streeter said. ATI, Nvidia, S3 and Intel still will
compete in the market for integrated chips.
Copyright (c) 1999 Dow Jones & Company, Inc. |
