S3 Bails on Graphics Board Business

S3 has announced that it will shut down its Diamond Multimedia-branded graphics board business and rebuild itself as a digital media and Internet appliance company. It will continue to supply and support its OEM customers, channel partners, and consumers of existing boards, but will cease development of additional products. The shutdown will not affect German-based FGL Graphics, the professional graphics division of S3, which will remain an independent division within the company. The announcement came in conjunction with S3's announcement that it is posting a second-quarter net loss of $36.3 million, or 40 cents per share, compared with a net income of $1.1 million, or 2 cents per share, for the same period last year.