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

To: SidStock who wrote (11117)	6/7/1998 2:13:00 PM
From: Bill Lin	Read Replies (1) \| Respond to of 14577

I think we are all better off going back to the original guidance from Walt Amaral, who said that this year will be slightly cash flow negative or at best cashflow neutral. that means earnings will be negative. When a company like S3 got so defocused that it lost its lead, and then gets dissed by so many analysts and players on the street (including institutional holders), it takes a long time to gain respectability again. If it is true that they have multi-generation design teams cranking out next gen 3D engines, that is good. very good. I still would like to see a coherent low/mid/high end strategy (products release) that has a semblence of cannibalization thru time. Part of the problem is the Dell theory. If you force your supplier to hold the inventory and eat the cost, the last guy in the chain gets the most flexibility. What its caused, in this oversupply situation, is a nasty reflex price cut action. Good for consumers, bad for bottomline. Lots has to do with the 8-12 week production cycle of semiconductors (shorter now?) and 2 week production cycle of boards, 1 week shipment cycle, and the inventory lag time inbetween. Dell theory forces shorter production cycles to reduce the economic devaluation risk. But it sure puts the hurt on hardware companies like S3, Intel, Mot. Especially when board life cycles are 9-12 months. Look at Voodoo2. They are saying it may be passe by this Christmas because of the new designs released this spring. yeesh. BL