Intel Corp is pulling out of its investment in graphics chip maker 3Dfx Interactive Inc, taking avantage of the company’s recent decision to make a second public stock offering. 3Dfx confirmed Friday a San Jose Mercury News story highlighting the decision, which was made on the exact same day that Intel launched its own Auburn i740 graphics chip, developed in conjunction with Real 3D Inc (CI No 3,347). Intel invested in 3Dfx back in November 1996, entering into an agreement to license an early version of the company’s Glide low level 3D applications programming interface at the same time, with an option to take up future versions. So far it hasn’t taken advantage of the offer. It ended up with a 5.3% stake in 3Dfx, and announced its intention to sell off its 666,667 shares on February 12th. 3Dfx had filed with the Securities and Exchange Commission the day before that it would offer 2.3m shares to the public. Following Intel’s move, and a separate decision by Chase Ventures to sell 22% of its stake in the company, 3Dfx amended the filing to sell 2.9m shares, which on Thursday’s pricing would raise $67m. Intel also has investments in its Auburn partner Read3D, and in 3D Labs Inc, with which it is working to design and develop 3D graphics chips for the high-end workstation market that it anticipates building up around the 64-bit Merced chip. It also acquired Chips
Technologies Inc last year for $420m (CI No 3,213). 3Dfx spokesman Steve Schick said he didn’t think the move was a significant one, and called the timing a coincidence. He said 3Dfx has a good relationship with Intel, and faced little direct competition from the 3D industry. Some 150 games titles support 3Dfx products, a figure set to double this year, he claimed. San Jose, California-based 3Dfx has just posted its first profitable quarter since its formation in August 1994, and Schick said that with the stock riding high and interest very positive, the company had judged it a good time to go to the market once again for more funds. We are looking at a substantial step up in our business, he said. On Friday, SoundBlaster company Creative Labs Inc became the first to come to market with products based on the firm’s new Voodoo 2 3D chip. On Friday at the close of market shares were down one point at $22.13.
