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

To: John Nasser who wrote (14246)	4/12/2000 9:06:00 AM
From: John Nasser	Read Replies (1) \| Respond to of 14577

From CNET.... In a second day of shakeups in the graphics hardware market, S3 agreed to turn over its graphics chip business to Via Technologies as part of a joint venture. Via will pay $323 million in cash and securities to S3, which will earn additional revenue as the joint venture reaches certain "financial milestones" that neither company disclosed. The transaction, which is expected to close by July, does not include S3's established Intel cross licensing and bus licensing agreements. "With this announcement, we've effectively completed the first phase of our long-term growth plan, transforming S3 from a graphics-focused semiconductor supplier to a well-positioned Internet appliance company with leadership product and substantial financial resources," S3 CEO Ken Potashner said in a prepared statement. Yesterday, 3Dlabs scooped up Intergraph's graphics division, essentially gutting the remains of its workstation business. In August, Intergraph largely exited the low-end PC and workstation market, focusing more on servers and its core competency of selling software. Both acquisitions follow others: 3Dfx Interactive last month bought Gigapixel for $186 million and ATI in February picked up ArtX for $400 million. S3 had been contemplating a sale of its graphics division for some time, but the sudden move shows weakness in the graphics chip market, say analysts. The sale follows Via in December taking a14.9 percent acquired with the purchase of Diamond Multimedia last summer. "In addition, we have signed and expect to soon be announcing key strategic partnerships that will add marketing and brand strength aimed at further propelling our Internet appliance business," Potashner said. The joint venture will largely focus on selling low-cost integrated products to PC makers, Via CEO Wen-ChiChen said in a prepared statement. "By combining S3's cutting-edge graphics and video capabilities with VIA's market leading core logic chipset technology, we believe that the joint venture will enable us to expand our strong competitive position in the rapidly-growing integrated solutions market." The deal, which is subject to regulatory approval, is not expected to disrupt regular operations or result in major layoffs. Email this story to a friend Click for printer-friendly format