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To: Michael G. Potter who wrote (8433)	10/18/1998 2:33:00 PM
From: Simon Cardinale	Respond to of 16960

Michael: I'm not sure that's so. Here's a piece of the MF snyopsis: About 2 million units of Voodoo2 have been shipped. Average selling prices (ASPs) for Voodoo2 were above $40 per chip this quarter, but in Q4 it will likely be $35 to $40; and Banshee sold in the $30ish range, as anticipated. The inventory reserve is around $4.5 million, but the Voodoo 1.5 on-hand could be be used if volumes increase. Up to 100,000 additional Voodoo2s could be made with the 1.5 product if the company obtains an additional chip for the 1.5. This conversion would increase the cycle time modestly. Is this the inventory reserve write-down or some other sort of inventory reserve? How could 100k V1.5 chipsets be worth $4.5M? $45/chip is more than V2 sells for. I just want to know what their operating loss was before one-time stuff to see how close the analysts were. Also, in order to compare one quarter to another I'd rather have some idea of what this number is. Simon