S3 (A LONGER TERM PERSPECTIVE) Message Board

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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE)

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May 12 5:00 PM EST

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To: John Nasser who wrote (10870)	5/7/1998 11:26:00 AM
From: Synapsid	Read Replies (2) of 14577

I would guess the Trio64V2 is sold to PC OEMs for well below $10. The Trio64V2 and ViRGE/DX/GX are sold to Taiwan/Hong Kong manufacturers also for low prices. In addition, these parts are manufactured in an older process technology (certainly not .35 micron), severely depressing gross margins. The PCI Trio3D, even at the same price, might have a better gross margin. I believe until recently, there was an understanding in the market that AGP chips would be close to $20. However, Trident probably undercut that severely with their very mediocre 975 chip and is selling high volumes in Asia to save their business. I would expect the AGP Trio3D to have higher margins, but that creates a dilemma for S3 of how to market el-cheapo AGP chips in Asia (Diamond a customer of the GX2-AGP). What's interesting is that the Savage3D is using a cutting-edge 0.25 process, a decision which may have been inspired by past experience of non-optimal manufacturing process.

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