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3DLabs buys Intense 3D as ATI, Nvidia breathe down neck

Shoring up workstation market against game-oriented rival look to high end

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3DLabs is to snap up Intergraph's graphics chip division, Intense 3D, for 3.69 million shares - worth around $30 million - and a further $25 million in cash and/or stock if the division performs well throughout the rest of 2000. The buyer described the acquisition of Intense 3D's product line as "complementary" and it's true that the Intergraph offshoot's Wildcat line does sit right at the top end of the Windows workstation market. 3DLabs' offerings broadly come in underneath Wildcat, though there's clearly some cross-over between high-end Oxygen boards and Wildcat, just as there's competition at the low end of the workstation arena from the likes of Nvidia, ATI and 3dfx. Indeed, that's likely to be what has driven the move. The power of 3D chips traditionally aimed at the PC games market has reached the point that when combined with good OpenGL drivers and solid board designs they can compete in the workstation space. Certainly 3dfx has been making plenty of noise about chasing applications other than games of late - particularly in its discussion of Mac support - and neither ATI nor Nvidia are loath to suggest an interest in the professional graphics market. Under the terms of the deal, 3DLabs will supply Intergraph with graphics cards for its own Windows workstation line. Intense 3D will continue to operate as a separate unit from its own HQ - for the immediate future only its technology will migrate into 3D Labs' kit. How long that arrangement will last, however, remains to be seen. As Peter Glaskowsky, graphics analyst at MicroDesign Resources, told CNET, there are just too many graphics chip vendors out there, and a degree of consolidation is inevitable. CNET notes the current sale of S3's chip division to Via, 3dfx's recent acquisition of Gigapixel, and ATI's ArtX buy. We'd add Apple's acquisition of Raycer, made last year, to the list, not to mention the collapse of Real 3D, whose assets are now owned by Intel (and licensed to 3dfx). The dynamics of the graphics market may well be why Intergraph was willing to sell off a division that not only supplies its own needs, but has an OEM business selling to the likes of IBM, Dell and Compaq. The implication is clearly that, on its own, Intense3D faces tough times ahead. A merger with a player that itself could do with a little reinforcement strengthens both, but the upward pressure from the games guys remains, and it's considerable. Meanwhile, don't forget that Intergraph itself is keen to move away from its hardware heartland into software and services, so the sale ties in neatly with that strategy too. ® Related Stories Via to buy S3 graphics chip operation 3dfx licenses Intel's Real3D patents Bitboys misses 3D superchip debut deadline 3dfx to grab Gigapixel for $186m ATI confirms $400m ArtX takeover Apple dashes to buy Raycer

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