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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: Hiram Walker who wrote (13388)	7/18/1999 11:53:00 AM
From: SBHX	Read Replies (1) \| Respond to of 14577

I agree with you. But one way to attack the whitney is to have the industry raise the performance/feature bar and keep making faster and more feature-rich chip. Strangely enough, intel has to do the same to push their PIIIs. (Paradoxically, the success of Celeron must be giving Intel strategic thinkers nightmares with their business model. Maybe they are just hoping to sell the celerons at these prices to make AMD blink. With Cyrix and IDT gone, AMD stands alone against this Goliath). The Killer App that does not run well on Celerons+Whitney is probably the thing that will keep the performance bar ahead of the integrateds. But the Killer App is nowhere to be found... The observation is that SIII needs a faster 3D chip than the existing Savage4s to pull far ahead of whitney in performance and category. Right now, the performance levels are too close to be comfortable. All the companies you noted clearly have chips that are about 2.5X whitney 3Dperformance levels, this is the comfort margin. A chip that is only 25% to 50% faster will get severe pricing pressures to compete against whitney. This effectively means either lower margins, or abandon Celeron space. By abandoning Celeron space, you come to the PIII space which means you compete against the likes of TNT2s ultra or R128pro or V3-3500 or G400MAX with clocks close to 200MHz and performance levels that are almost 2X. There will be many versions of NVidia,ATI,and 3 DFX chips by then,all with higher potential than what INTC is doing. I think I will replace my graphics boards many times in the next few years,much like I replaced my modems the last few years. The retail market for upgrade graphics boards is tiny (this is why DIMD suffered, and why TDFX had to buy STB-despite their low-volume high margin strategies of the past). I know this is hard to believe for most of us who go to Fry's, but the OEM chip/board market is where you make money.

To: Hiram Walker who wrote (13388)	7/18/1999 2:03:00 PM
From: Charles R	Read Replies (2) \| Respond to of 14577

Hiram, <I look for p/sales under 1, good management(DIMD has terrible),and an economic reason to turn around.> I share this philosophy on stock picking. I have over the years avoided graphics chip companies because of their fleeting technological advantage but recently I sunk some money into SIII/DIMD after doing some research on Rio and Rio port. Looks to me like the current Savage 4 uptick is short term deal and the long term story is what DIMD can so to SIII. The long term might begin with this Christmas. Looks like Rio is picking up steam just in time for what could be a killer Chrismas season for MP3. What is your take on DIMD and Rio/Rioport? Thanks, Chuck