The company plans to close its Juarez, Mexico, card manufacturing plant and remove itself from the business of building the graphics cards that reside in desktop PCs.However, before you can say 'Darwin Awards,' 3dfx has issued this press release explaining their actions.
3dfx Interactive® Inc. (Nasdaq: TDFX - news) reiterated today information that was disclosed in a recent Form 8-K filing regarding its current business strategy. The company, which has held the number one retail graphics position since December 1998, plans to maintain its dominant retail position, expand into the OEM PC business, and to license its core graphics technology, code-named Mosaic, into non-PC markets.The Register chimes in with this commentary.
``As we expand into new markets, 3dfx Interactive must focus on its core competency - developing leading-edge graphics technology,'' said Alex Leupp, president and chief executive officer. ``The sale of our Juarez facility will allow us to continue selling add-in-board products to the retail channel, with significantly reduced fixed costs. We also plan to pursue additional retail partnerships to ensure we get our high-performance graphics technology in the hands of our loyal customers in a way that makes the most sense for our shareholders as well.''
3dfx Interactive also plans to enter into strategic relationships with integrated chip set manufacturers, through license agreements and other arrangements, to bring its highly efficient, high-performance Mosaic graphics technology to desktop and mobile PCs. The Mosaic technology features 50% better performance than today's graphics products, at one-fifth the die size and with one-third the required memory bandwidth.
The plan should allow 3dfx to maintain its own brand of graphics cards and doesn't force the company to go cap in hand to the add-in board partners it annoyed back in 1998 when it decided to focus on the retail space by manufacturing its own cards. That move was cemented by the acquisition of board maker STB Systems.3dfx would like to target OEMs and integrated chipsets where 800 pound gorillas the likes of NVIDIA and ATi roam.
The snag here is that both ATI and Nvidia are targeting these areas very aggressively. ATI has its system-on-a-chip operation, and Nvidia has the expertise gained through its partnership with Acer Labs. 3dfx has its powerful, bandwidth-minimising Gigapixel technology, but that's not due until its next-but-one generation of graphics chip, codenamed Mosiac. Rampage, the successor to the VSA-100 (and thanks to everyone who put us right on this one yesterday), comes first, and it will be interesting to see what it can offer potential customers in these emerging markets.And down from the mountain comes Diane Fosse, err, Bubba Wolford to explain the gorillas in the mist to the rest of us. C|Net Gamecenter's exclusive.
At the Comdex trade show in Las Vegas on Wednesday, Wolford told Gamecenter that the Voodoo5 6000 has not been cancelled; that 3dfx will not start selling current chipset technology to third parties such as Creative Labs and ELSA; that Voodoo products, including current graphics and TV cards, will continue to be manufactured; and that the company isn't going belly-up any time soon.With NVIDIA and ATI surging, it doesn't change the fact that 3dfx is in dire straits. Hopefully, this consolidation will help them get back on track. Time will tell if and in what form 3dfx will survive.