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

To: JerryP who wrote (12691)	2/2/1999 12:23:00 PM
From: Chris Tomas	Respond to of 14577

ZDNet: S3 goes mainstream with new 3-D chip Can the Savage4 help S3 get back in the game? Graphics chip maker S3 Inc. unveiled a next-generation graphics processor on Monday -- a second step toward recovery for the beleaguered company. If successful, the new Savage4 chip could help the company gain ground that it previously lost to competitor ATI Technologies Inc. Both companies' chips are aimed at PC makers looking for 3-D and video features at a low price. "It isn't their intent to be the fastest chip on the market," said Dean McCarron, principal researcher at chip-technology watcher Mercury Research Inc. "They're trying to make a high-performance product that is reasonably priced." For the company is on the line. In mid-1998, S3 had bet its future on its Savage3D chip -- a product aimed at game players. That strategy, the company's first step toward recovery, has kept S3 in the game -- barely. A week ago, the company posted a loss of $70.3 million, or $1.36 a share, for the fourth quarter on sales of $41.5 million. First Call consensus expected it to lose 32 cents a share for the quarter. For the year, it lost $113 million on sales of $224 million. "This part should help them, at least, stay in business," said Peter Glaskowsky, senior analyst with microprocessor researcher MicroDesign Resources Inc. "What really matters is whether they can deliver it on time." "And every little bit helps," said Mercury's McCarron. "The downside is that they have been designed out of several accounts because they haven't had a (chip) like this until now," he said. "But because they are a smaller company, they gain from some fairly small wins with companies." Better 3-D for everyone Yet, S3 does not just want "fairly small" deals with its customers. This time, the company is going straight for the mainstream market -- aiming for volume not margins, said Michelle Belusar, product line manager for S3. "The Savage4 is a strong product for sub-$1,000 PCs and has enhanced flat-panel features for laptops," said Belusar, pointing out that Savage4 has something for every computer segment. The new chip will support Intel's quadruple-speed advanced graphics port -- a technology for removing any roadblocks to better graphics by, essentially, adding more lanes to the PC's internal data highway. In addition to AGP 4x, the chip includes LCD support, true 32-bit color, and 128-bit 3-D processing. For hardcore multimedia fans, the chip also offers DVD hardware acceleration and trilinear-filtered single-pass multi-texturing -- a technology that allows textures to be layered over one another smoothly, adding realism. Such features are expected to be a must for every new graphics chip in 1999. The chip comes in two varieties: The GT for sub-$1,300 systems and the Pro for higher end systems. The Pro will cost $25 in quantities of 10,000, making it a inexpensive option for computer makers.