Battle over three-dimensional graphics takes shape; chip firm S3 wins round over Cirrus Logic, with giants poised to strike

Article Abstract:

S3 dominates the 3D graphics chip market, expecting to ship more than five million chips for PCs by the end of 1996. S3's reported increase in sales as of 3rd qtr 1996 place it far above any competition. Cirrus Logic, which was replaced as the leading 3D chip vendor by S3 in 1995, is responding to S3's dominance by launching the 3D Laguna chip, originally released in Oct 1996. S3 has debuted in several markets with its low-priced chip featuring 2D graphics along with video and sound capabilities. S3's low-end strategy set it apart from other 3D chip makers while allowing the company to gain at least 50% of the market. S3 has also invested $8 million to convince the top 10 US PC makers to customize their games for S3's chip. Although S3's successful tactics have placed it on the retail packages of these top companies, S3 must keep a close eye on its formidable competition. Intel's plans to release its own 3D chip after Jun 1997 may signal upcoming troubles for S3.

ICs by Function NEC, Integrated circuits, Marketing, Computer peripherals industry, Three dimensional displays, 3D technology, Company marketing practices, Coprocessors, S3 Inc., Company technology development, Company analysis, Three-dimensional graphics, Three dimensional graphics

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Cirrus to reduce chip manufacturing by 70%, lay off 400 to 500 employees

Article Abstract:

Cirrus Logic Inc. announced it will phase out certin businesses and lay off 400 to 500 employees as part of a restructuring that could result in charges of as much as $500 million in the second quarter. The company said the moves are aimed at reducing its chip manufacturing capacity by 70%. Cirrus intends to focus on two profitable product lines, so-called linear and mixed-signal chips for markets such as personal-computer storage and audio products. The company expects to report results for the quarter on Oct.21. As a result of the restructuring, the company said it plans to drastically change its manufacturing joint ventures with IBM Corp. at a plant in NY, and Lucent Technologies Inc. at a plant in FL. Rather than use capacity in those chip factories, Cirrus will rely on third-party chip makers.

Comment:

Will phase out certin businesses and lay off 400 to 500 employees as part of a restructuring

United States, Strategy & planning, Labor force information, Organizational history, Company Planning/Goals, Integrated & Hybrid Circuits, Cirrus Logic Inc., Article

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Motorola sets $170 million charge for quitting DRAM chip lines

Article Abstract:

Motorola is abandoning the DRAM market and plans to take a $170 million charge against its second qtr earnings to cover the move. The decision is based on the 80% drop in prices the memory-chip market experienced in 1996. It is not expected for any companies to make a profit in the DRAM market during 1997, as it is expected to fall an additional 4% to $25.3 billion. Motorola's chip revenue in 1996 was $7.9 billion, approximately 4% of which came from DRAM chips. Analysts expect Motorola's second qtr earnings before, the charges to be 57 cents a share. In the second qtr of 1996, the company earned 54 cents a share, or $326 million on $6.83 of revenue. Motorola stock rose 12.5 cents a share to $76.25 a share on the New York Stock Exchange.

IC Memory Chips, Semiconductor industry, Finance, Computer memory, Company sales and earnings, Motorola Inc., MOT, Dynamic random access memory, DRAM (Dynamic random access memory), DRAM, Company Earnings/Profit

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