S3 Inc has lost the custom of one of its OEM customers, Creative Labs Inc, following its acquisition of graphics board maker Diamond Multimedia Systems Inc last month (CI No 3,688). Creative, which only signed up to use S3 Savage4 graphics chip in its boards back in March (CI No 3,616), says it will now be looking for new technology once its current contract runs out in October. Creative says it can’t use S3’s technology any more, because Diamond is one of its direct competitors.
Creative has been through this before. When 3dfx Interactive Inc acquired board manufacturer STB Systems Inc at the end of last year for $141m (CI No 3,559), both Creative and Diamond, who at the time were each shipping boards using the 3dfx Voodoo chip, were forced to shift to rival chips because they found themselves directly competing with their supplier. Both chose to move to S3.
In contrast, board manufacturer Number Nine Visual Technology Corp says it will stick with S3, despite the acquisition.
