Feeds

Nvidia agrees to buy ailing 3dfx for $112m

3dfx will lay off most of staff and dissolve

  • alert
  • submit to reddit

5 things you didn’t know about cloud backup

The PC sales slowdown today claimed fresh blood: 3dfx has decided to shut its doors and flog most of its assets to Nvidia for $112 million.

Today Nvidia agreed to pay $70 million cash and one million in shares for the rival graphics card chipmaker, whilst loaning 3dfx $15 million that will be credited to the cash part of the price when the deal is completed.

3dfx, which has been locked in a patent infringement battle with Nvidia, today said it would cut "substantially all" of its workforce by early next year, plus reduce office space and other expenses.

Once the assets are sold off the company will dissolve.

In a conference call tonight execs said they had considered "a wide range of other options", including mergers or bankruptcy, before selling out.

But Alex Leupp, 3dfx CEO, commented: "We strongly believe that to reduce expenses, sell our assets and dissolve the company provides the highest return to our creditors, shareholders, and employees."

The deal ends the patent infringement litigation between the two companies.

After markets closed, 3dfx also recorded a net loss of $178.6 million for the third quarter. Sales dropped 63 per cent to $39.2 million in the period ended 31 October. "Our financial results illustrate the dramatic shift we've seen in the retail market over the past quarter," said Leupp, who added that high inventory expenses, falling margins and slowing demand had done "irreparable harm" to the company.

"We have experienced a significant slowdown in demand for our products, especially the Voodoo 3 and Voodoo 5 boards. This slowdown is consistent with the overall softness experienced by the PC market, especially in Western Europe.

"In addition, we've experienced pricing pressures in the channel. Finally, our inability to secure a bank line of credit has impacted our ability to build inventory to meet even the existing demand."

In October the graphics card maker warned that Q3 sales and earnings would be "substantially" lower than expected. At the time it blamed "overall softness in the European retail and system integrator channels." ®

Related Stories

Voodoo 4 or 3 cash dilemma
3dfx clarifies graphics card strategy
3dfx pulls plug on graphics card production
Blame Europe: Now it's 3dfx's turn
Nvidia to buy 3dfx?
3dfx on course to win Nvidia patent clash

5 things you didn’t know about cloud backup

More from The Register

next story
BBC: We're going to slip CODING into kids' TV
Pureed-carrot-in-ice cream C++ surprise
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Twitter: La la la, we have not heard of any NUDE JLaw, Upton SELFIES
If there are any on our site it is not our fault as we are not a PUBLISHER
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?