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

To: Sun Tzu who wrote (7982)	10/7/1998 7:14:00 PM
From: Bob Howarth	Respond to of 16960

Great job. The statememnt "nVidia has implemented our patent in silicon" is amazing. Last time I checked, that was illegal. Isn't this a pretty serious thing (if true)? Do you know what the relationship with AMD (boy am I down on this one since yesterday) is? Thanks

To: Sun Tzu who wrote (7982)	10/7/1998 7:19:00 PM
From: Chip Anderson	Respond to of 16960

Good job S.T. This is very consistent with what I've been hearing too. GOD I WISH THEY'D ANNOUNCE THE OEM DEALS! OK, I feel better. Chip "Gateway?" Anderson

To: Sun Tzu who wrote (7982)	10/7/1998 7:33:00 PM
From: Patrick Grinsell	Read Replies (1) \| Respond to of 16960

Sun, congratulations on the exellent sleuthing here. A couple of questions for clarification. Who is answering these questions and are they paraphrases or direct quotes? My comments: The follow up Banshee timeline has now changed from 1Q99 to 2Q99. This is VERY bad and on par for how 3dfx has been running things. The six month timeline for follow-up products is now turning into a year. This also implies (but doesn't guarantee) that Rampage probably won't be out until at least 3Q99. Our relationship with AMD involves technology, brand and new whole product offerings. Technology offering in conjunction with AMD? There are plenty of thing I could think of and none of them are bad. The 200M in annual revenue is about what I expected. Given only what we know about the public roadmap (Q2 follow-up Banshee and no new retail product for quite a while) it would seem 3dfx is in for a loss for next year's earnings. Somebody please tell me where I'm wrong here. Pat

To: Sun Tzu who wrote (7982)	10/7/1998 9:07:00 PM
From: Simon Cardinale	Read Replies (1) \| Respond to of 16960

Good work Sun. Here are my thoughts: It's not appropriate to say where we are in this [WHQL certification] process. I am also taking this as a no. I'm not sure what effect this will have on OEM deals. It's not something that they put in their little ads. WHQL was very important in the early days of Win95, but maybe Win95/98 is a mature enough product that they're willing to move away from this WHQL certification thing. Let's hope. We now have multiple design teams hard at work on future products and technologies. We will continue to pursue a strategy that provides the highest performing, most extreme products for the avid gamers and other products designed more for the mainstream. A 32 MB card is a possibility, as is inclusion of a geometry processor. They've already spilled the beans on geometry acceleration, and 32MB is an incremental thing. I feel confident counting on these in their next hard-core gamer retail offering. You can probably expect a first look [at the follow up to Banshee] near the beginning of the year with general availability in Q2. Is this the .25um Banshee, Banshee2, or what? I assume they mean the follow up OEM/Banshee family chip. [The PC gaming] market is probably a moving target that is larger than anyone fully realized. It certainly seems to be at least $200M annually. It is probably increasing at a significant rate. Their target market is bigger than the PC gaming market. They're also cutting into the console market. Anyone know how big this market is? The way things are going, owning a PC is pretty much mandatory if you've got kids and a little money. By buying a $100 3Dfx card you can match the performance of most consoles. We believe nVidia has implemented our patent in silicon. We are not claiming that we have a monopoly on having multiple TMU on a chip. This is what most of us expected. However it doesn't defuse the hope that their method for combining textures is so basic that other methods would be inefficient (run too hot and/or too slow) or expensive. -------------------- Good work with this interview, Sun. Overall nothing in their answers causes me to reevaluate my expectations for 3Dfx's (and TDFX's) future. I'm happy to have a few lawsuit and OEM facts nailed down. I hadn't realized how important the European market was. I'm still thinking about that. Simon

To: Sun Tzu who wrote (7982)	10/7/1998 9:45:00 PM
From: Joe C.	Respond to of 16960

Sun Tzu, One comment that really perked my ears was their statement that ""A 32 MB card is a possibility, as is inclusion of a geometry processor." Up until now, they've avoided the geometry processor question by saying something to the effect that they've debated the question. With 32 meg, a geometry processor and new rendering techniques possible, I could understand why Ballard is shivering at the possibilities. If they can deliver such a card next year, most people will be able to get huge performance increases without having to upgrade their CPU's. Intel and the console makers might not like this, but imagine that kind of raw power with the added benefit of cable modems :) Joe C.

To: Sun Tzu who wrote (7982)	10/8/1998 1:11:00 AM
From: Eric Howard	Read Replies (1) \| Respond to of 16960

Sun, Thanks for getting all of this information. I guess what I really want to know is when 3DFX is planning to release their next consumer part, "Rampage". I think in the previous conference call they mentioned that the second rev of Banshee would be an OEM only part. If this is the case then until "Rampage" comes out 3DFX is going to have to make the majority of its revenue off of Banshee. My question is how many units do they have to sell in order to stay profitable. I think we need to find out the margin they expect to have on their system OEM chips. Hopefully this new campaign boots Voodoo2 sales but I fear that any boost in sales will be short lived and will not be much of a factor in the revenue next year. I will try and get the numbers from the Nvidia red herring on their margin from OEM parts. Europe being 50% of the revenues seems very strange to me. Eric