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Technology Stocks : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: Chip Anderson who wrote (5756)	7/24/1998 12:25:00 PM
From: Yakov Lurye	Read Replies (1) \| Respond to of 16960

Chip, I didn't follow TDFX long enough - maybe you could save me time ploughing through archives and tell how long was the delay between the beta-release of Voodoo and the announcements of Voodoo-based cards? What I am trying to figure out is whether we should've expected more Banshee-based cards announcements by now. My current understanding is that it is a bit early (maybe late August-September?) (Rush/Voodoo may be a more straightforward comparison, but hopefully, they'd learned how to sell 2D/3D cards from the Rush experience) TIA, Y.

To: Chip Anderson who wrote (5756)	7/24/1998 7:34:00 PM
From: David Bryant	Respond to of 16960

Hi all... Well that is something you are not about too see too soon I think. Intel has made a series of major blunders over the past year and is now paying for them. The move to "Intel only" slot 1 motherboards and processors without allowing Amd/Cyrix/TI/IBM licences to produce them was a brilliant example of abusing power. A year ago Intel had more than 90% of the processor market. Amd and Cyrix squabbled over the remaining 7-10%. This quarter AMD's 30% market share of processor sales seem to show that Intel misjudged the market with its overpriced anticompetitive slot1 and that many folks sat on the fence rather than going Pentium2. They are finally upgrading now that you can get an equally performing K6-2 for half the price of a P2. Now you may disagree with this analysis but we do have Intel coming in under estimates, laying off workers and mothballing fabs and trying to speed up its low price celeron and mendecino introductions. All this time AMD are trying hard to meet demand from retail due to booming OEM use and are opening a new .25 fab in Dresden,Germany. It sounds very much to me that the Lawyers and Accountants at Intel got too greedy and tried to get rid of the competition and ended up shooting themselves in the foot. Our lesson from all this (i'm long from 10 just after the SEGA fuss) is to always follow the technical leaders like TDFX,AMD etc. and not those who just advertise/market loudest. Banshee will put TDFX into the big league of ATI/Matrox as it has true technological leadership at this time.

To: Chip Anderson who wrote (5756)	7/24/1998 9:13:00 PM
From: Michael G. Potter	Respond to of 16960

TDFX called me back today (they were a little slow, but I'm sure that they've been swamped recently and they don't have a new IR person yet). I asked some follow-up questions based on the conference call and my financial statement analysis. 1. The P,P,&E purchase of about $3 million was for "back-end" equipment. From the description I was given, it appears to be design tools to speed up making the mask for the chips and is meant to cut down R&D cycle time. 2. The flattish estimate for Q3 was for sales (compared to Q2, the V from Q3 last year will be pretty good). I was a little confused about the explanation for net income expectations, but it seemed to be flat from Q2 as well with some (small) possibility of upside. 3. Q3 is more back-end loaded and they do not have as many orders on hand as they have from the previous quarters. As they're now in mass production, the board makers are ordering more when they need the chips instead of in advance (which happens when a part is under allocation which it was last quarter). My opinion - this ups the risk some because of the growth in inventory (dies from what TDFX said today). 4. They're confounded by the stocks performance. Maybe they're not getting credit for their past retail performance and the forward look is concentrating on the upcoming move to OEMs (where they're unproven and the risk is greater). 5. OEM announcements would be more likely to come later in the quarter than earlier in order to align with OEM wishes, including their advertising schedules. My opinion - this makes sense, Banshee would come out late in the quarter and the OEMs would not want customers to delay orders now because they want the Banshee version which is coming in a month or two. Q4 purchases tend to be for home use and that equals games where TDFX rules the roost. Michael