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

To: John Floyd who wrote (7204)	11/3/1997 10:47:00 PM
From: Adrian Wu	Read Replies (2) \| Respond to of 14577

To all: Here is my take on the situation. GJ has majorly F***ed up this company, and he really should go. This is the last nail in the coffin for him. The company, however, is more than salvagable. Don't forget, S3 still is the market share leader in the low end. All the competitors you mentioned are all clamouring for the high end. This Christmas will be a sub-$1000 PC market, especially in Southeast Asia where the currency has devalued. I doubt these machines will have RIVA 128s or Vodoo chipsets in them. I think the ViRGE and the Trio, however unglamorous, will still adorn these machines. S3 has effected eliminated most of the competition on ground zero. As someone said, Tseng is on the way out, Trident has limited capacity and Cirrus looks as if they are packing in their graphics business. ATI chips fail to get onto motherboards which means their market share will always be limited. I think the most worrying competitor will be the Verite V2100, which is aiming for the motherboard business. As for business PCs, the Trio still has a stronghold there. Don't worry about the bottom line at the mooment; earnings is an artifical number anyway and is very subject to interpretation. As long as S3 has positive cashflow, and plough their resources back into R&D, we should do OK. If the GX3 and Vortex is competitive in terms of performance, they have half the game won already. S3's large volume (thanks to the crappy ViRGE which is dumped onto the market like garbage) will ensure cost efficiency, and therefore a higher margin for the high end. There established relationship with OEMs and board manufacturers makes for an easier entry. They may even squeeze the margins on the smaller players (such as Nvidia, Rendition, 3D Labs) who only have high end products, by the tremendous cashflow that S3's low end products are generating. Don't worry about the joint venture; the Taiwan market will recover quickly and UMC is run by very competent people. Now, if the GX3 and Vortex sucks.......