***Conference Report - Technology '97
by John Latta
Technology '97 is the annual investor conference which has become a
premier showcase for high technology companies to tell their story. It
is focused exclusively for the investor community and as a result
vastly different from the normal trade show. Each company has only 30
minutes to present its story and there is considerable emphasis on
markets and financial performance. However, companies frequently
highlight roadmaps and disclose future plans. As such it is a very
important forum to look for industry trends.
S3
S3 is a marketing gorilla. Its marketing machine is unmatched in the 3D
industry and they continue to get better. Only a slight problem - the
foundation 3D technology is weak - the chips have yet to represent high
performance technology. At Technology '97 this was only made more
evident.
3D units shipped in 1996 - 5m. It was claimed that they had 53% share
and ATI had 23% share and the rest with 24%.
S3 stated that the graphics controller is becoming the 2nd most complex
part of the PC behind the microprocessor. In 1998 they expect that the
graphics controller will take from 1.1 to 1.5m gates. However, the
software complexity is not trivial - it was claimed that S3 has 350 man
years in its software products.
They laid out their current 3D strategy in two phases based on image
quality. The first was labeled as Animation and this will emerge in
1998. The second phase is what they called Video 3D which creates
photorealistic 3D which can be integrated with video - time frame 1999.
The current ViRGE chip is a 10X performance over software rendering and
this will be supplemented by the next generation chip (Animation) which
will be called the ViRGE/T and will have 1000X performance (10X over
the current generation). This chip or family of chips will use
Microsoft's Talisman technology including anisotropic filtering.
S3 is also focused on taking share from Chips and Technology in the
mobile market, also using 3D technology. A chip for this market is
sampling now and is expected to ship in quantity in Q2. In addition to
the mobile market S3 has also targeted the audio market. The
combination of these two is expected to generate 10% of the company's
revenue in 1997 - $60m.
S3 also stated that the 3D product family would go from 3 chips now to
5 by the end of the year.
In its S3D developer program S3 spent from $8 - $9m for conferences and
supporting game developers. They are now taking the same approach to
the Internet and 3D. In fact, they are going beyond this by setting up
a $20m investment fund for supporting software companies which expand
the potential for 3D acceleration. Intervista is the first recipient of
investment funds.
Process technology is very important to 3D and S3 stated that at the
end of 1996 they were on 8" wafers and 0.5 micron technology. Right now
their parts are being done with 0.45 micron line widths. In design now
are parts for 0.35 micron and these will be tested and sampled Q2. By
the end of 1997 S3 will be designing 0.25 micron parts which will be
shipped in 1998. They claimed that one of their fab partners, TSMC, is
only one quarter behind Intel in fab technology.
Their view of the market evolution is that 3D will continue to be
focused on the consumer while the business user will remain focused on
2D. Yet, they feel that 3D will move to the corporate channel by the
end of 1997. This will be driven in part by the Internet.
www.s3.com
3Dfx Interactive
To a packed audience Gordon Campbell, Chairman, gave a presentation
totally in 3D. Very impressive. He began with a model of their building
and walked from the parking lot to the lobby and then to various rooms.
One room was labeled arcades and he showed many arcade machines and
could walk up to them. When he went to a PC display in another room a
game would show up and he would show how it was played. At the end he
showed some of the new titles. Some of the new software is impressive.
Very effective use of 3D and a way to communicate. The quality was
excellent. During the demo Gordon explained the various features in 3D
which included bilinear filtering and MIP Mapping.
3Dfx announced its roadmap for two future products. The first is due in
the 2nd half of 1997 and will be a cost reduction of the Voodoo
architecture. It will be an integrated single chip accelerator and
intended to be directly competitive with the S3 Virge family. This chip
marks the end of the pass-through cable. It also appears that this will
be the first AGP chip from 3Dfx.
The next generation high performance chip set builds on the Voodoo only
to the extent that it is modular where components can be used to build
scaleable performance. It was claimed that the performance would be 2X
to 3X the Voodoo family. Parts due in 1998.
www.3dfx.com
Rendition
Only limited details were provided on the next generation part. It will
be optimized for AGP and targeted for the Entertainment PC and be
optimized to exceed Intel's GC97 requirements. It is expected to ship
by mid '97 and that it would have performance "substantially in excess"
of the first generation product. Pricing will be in the low $30's. In
summary, they claimed part will allow them to maintain their
performance leadership position.
The company is currently in their 3rd round of funding and this should
be completed in 30 - 45 days.
www.rendition.com
SGI
SGI shipped 19m MIPS processors in 1997. They claim to be the largest
RISC processor company.
In the latest quarter the company had $825m in sales.
The lines of business are:
Manufacturing (CAD/CAM/etc.) 30%
Entertainment 15%
Visual Simulation 15%
World Wide Web 10% (growing at 40% to 50%)
Earth Science 10%
Chemical and Medical 8%
Database 6%
Other 6%
By products the breakout is:
Desktop 40%
High Performance Computing 35%
Application Software 5%
Enterprise and Web 20%
SGI reported that the O2 sold 16,000 units the first 90 days.
In terms of growth they see the following:
Web 27%
CAD 10%
Software Engineering and EDA 11%
www.sgi.com
Number 9 Visual Technologies
Number 9 announced that they are a chip company and one which sells
cards also. It was stated emphatically that the long term goal of the
company is to sell chips. They claimed that they would have the best
single chip 2D and 3D solution.
In one area where Number 9 has a clear advantage is in bandwidth to
memory. It was stated that the 3rd generation Imagine chips have 1.6GB
of memory bandwidth. Today, and for the near future, they require dual
port memory technology - VRAM and WRAM. In the cost sensitive markets
they see SGRAM being the leading memory technology.
Their first generation 3D part would perform at 2.5X the 500TX in Fill
Rate and 3.5X in Polygon Rate. At the OEM level the card would cost
from $250 to $600 based on memory.
Number 9 claimed to be #2 behind Matrox in the high end business 2D
space and wants to be the same in 3D. Thus, for the $1,000 and less
pricing for their card, which they see this product as being directly
competitive against the 3DLabs cards at $2,000 to $5,000, this is a
market killer, in Number 9's view.
The current generation of the Imagine 128 uses 0.5 micron technology
and the next generation will go to 0.35 micron - the fab partners are
NEC and LSI.
www.nine.com
Autodesk
In spite of a disappointing year at Autodesk, the company sees bright
prospects for 1997. Without holding back, the company stated that
Autocad R13 was released too soon. By Q2 1997 they will release R14,
which runs exclusively on Windows 95 and Windows NT. In order to
address the quality issue the company will be releasing shortly 10,000
beta copies for extensive testing. The company stated that there are
1.6 - 1.7 million versions of Autocad and of those 450,000 are on
Autocad NT. Including unauthorized versions the company claimed there
are 10m copies of Autocad worldwide.
Increasingly the company is moving to a suite of products. For example,
its Mechanical Desktop product for MCAD has sold 20,000+ copies and
they are seeking sales of 100,000+ seats. Another product in the GIS
area is Autocad MAP and this has sold 150,000 seats.
It was stated that 3D Studio MAX has sold 25,000 copies. When asked the
company acknowledged that there is space in the market for products
like 3D Studio MAX that have price points less than this product.
It is clear that the future of the company lies beyond Autocad, in
terms of establishing, new sales. They acknowledged that the growth in
Autocad seats is in the single digits (percentage). Thus, all the more
reason to more closely integrate the products and seek greater income
per seat sold.
www.autodesk.com
www.ktx.com
Points to Ponder
Technology '97 highlighted the beginning of a classic marketplace
battle by companies seeking to dominate 3D. Today we see two entrants,
3Dfx and S3, and the Q4 1997 results will be closely watched. 3Dfx
clearly has the best technology on the market today - at least for the
price point. Yet, they are not on a par with S3's marketing. S3 has
built a marketing juggernaut which is unmatched in the industry. Who
will win - technology or marketing? Tough call. At the WAVE Report we
are biased to the technology but history has shown over and over that
marketing wins. 1997 will be an interesting year in 3D.
Wave Issue 9704 2/28/97 Article 6-01