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Technology Stocks : S3 (Multimedia semi's place 2be)
SIII 0.00010000.0%May 12 5:00 PM EST

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To: Ibexx who wrote (7128)1/21/1997 2:07:00 PM
From: Ibexx   of 9477
 
All,

-continued on with Chaplinsky update--

OUTLOOK:

> The company is experiencing seasonally weaker consumer product sales offset by stronger add-in card and desktop sales into the corporate market. Although S3 has enjoyed exceptional growth with its 3D VIRGE graphics accelerators into the consumer and retail markets, the company is still very well positioned for the corporate desktop with close to 60% of sales coming from this segment. In addition, the company expects to see normal price declines throughout the quarter. The company is therefore forecasting sequential revenue growth of 5% plus or minus 2%. We (H&Q) were originally estimating 10% sequential growth.

> The strong PC corporate upgrade cycle is fueling strong domand for S3's 2D graphics accelerators led by the Trio64V+ which is the mainstream 2D graphics chip offering 2D graphics and video for the corporate desktop PCs. S3 experienced strong demand for its 2D graphics accelerators as the Trio64V+, -V2 and soon to be rolled out Trio64V3 prsent an excellent 2D roadmap. In addition, the company's 3D VIRGE product line is well positioned at all three price points of the 3D market with the VIRGE VX occupying the high end, VIRGEGX/DX the midrange and the original VIRGE occupying the low end of the 3D market.

> Gross margins for S3 are expected to expand to 42% as the company experiences strong demand for its product and through cost reduction programs.

More to be continued on the next posting...

Ibexx
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