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: MarieS who wrote (11135)	6/9/1998 4:27:00 PM
From: Bill Lin	Read Replies (1) of 14577

This current quarter is a big money loser. Trio 3D is under attack 3 ways. Intel announced a chipset (like S3's discountinued Plato) with graphics 2D circuitry Intel 740 is new $90 AGP graphics standard ATI,TRID,Matrox are discouting their older boards to clear channels, cutting into Trio3D sales Virge MX is still a slow 3D card for portables. NeoMagic 256 bit card may cut into portable sales in Q4. Savage3D is only an average mainstream card, not the killer S3 is trying to pretend it is, so the sales price of chips will be in $20's. TDFX still is leader in segment with VD2 but it may backslide with a 2xAGP Banshee solution later this year. TNT from Invidia sounds fantastic at $200 retail (same as S3D board), and unlike S3d is faster than VD2. Many of these products are in development now, and the graphics area is hotly contested and commodity priced. S3 must show profits. Look at their overhead costs. Very high. Negative operational cash flow (exclusive of USC fab sale). Is it the darkest before the turnaround? I don't know yet. But that's my guess why S3 is stuck in a rut right now. BL ps don't believe company PR.

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