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

To: shane hartman who wrote (12410)	12/18/1998 4:02:00 AM
From: Don Earl	Read Replies (1) \| Respond to of 14577

Hi Shane, None of the news items I've seen mention anything about payments to S3 by Intel. As I understand the articles, it's an agreement to use each others patents. No money is changing hands, Intel has free reign to use S3 patents, and S3 is prohibited from building a processor. Intel paid $17 per share for Chips & Technologies in order to build the i740, which will be incorporated into the Whitney chip sets due out in the first half of 99. With the rapid advances made in graphic chips in the last 6 months, the i740 is WAY behind the curve in performance. In spite of some stability issues that have hurt sales of Savage, it's speed is in the top two or three, depending on what reviews you're looking at. It appears the driver issues are on the verge of being corrected, and I believe OEM orders will pick up as soon as they are. The last conference call said S3 will have one of the first chips that will support 4xAGP. It might have been related to the pending Intel deal, but it's something they would have had to do anyway, with or without the patent agreement. On the other hand, if Intel has cutting edge graphics to incorporate into single chip solutions, what happens to the graphic chip companies? What happens to Savage, Voodoo, TNT, Banshee, et al if Intel puts together a single chip solution with a 450 processor and 3D graphics comparable to the fastest add in cards on the market? It is nice of Intel to help S3 start a new business in set top boxes and hand helds before they stomp the entire graphic industry flat. Having S3s patent hoard should give Intel everything they need to clear the field. Regards, Don