The Sunnyvale, California, company, which specializes in programmable "media" processors that can handle 3D graphics, DVD playback, and modem functions, appears to be one of the first casualties in an industry-wide consolidation that analysts and even graphics chip executives predicted earlier this year. The market is overcrowded and few developers can command prices high enough to offset expensive development.
Layoffs began this week, said Dave Wilt, a company spokesman. Wilt would not confirm the number but said there would be a "substantial" reduction in headcount. Chromatic currently employs 150. Sources said the total would constitute about half of current employees.
Wilt also said that the company would discontinue its Mpact line media processors. Instead, Chromatic will work on developing a new type of media processor.
The Mpact and Mpact2 chips constituted one of the more elegant--but also most complex--solutions in the graphics market, according to Peter Glaskowsky, graphics analyst for MicroDesign Resources. Unlike most 3D accelerators, the Mpact was programmable, like a computer microprocessor. In other words, functions could be added to it.
Unfortunately, making the chip programmable made the Mpact expensive to develop. In many ways, developing for the Mpact was nearly as arduous as developing a microprocessor. The Mpact has its own instruction sets, for instance, while most 3D chips don't.
"You got great results, but you had to put a lot of work into it," he said. "They probably just reached a point where they realized just how difficult it can be to support your own microprocessor."
Glaskowsky predicted that Chromatic would regroup and try to pursue a media processor that used common computer languages.
Despite the setback, Mpact has its adherents. Gateway uses the Mpact2 in its G-series of consumer computers while both Gateway and Compaq adopted the original Mpact for their respective PC-TV models. Add-on board vendors have marketed Mpact cards as well.
In an official statement, Chromatic said it will continue to support existing Mpact2 products but that in the future it would concentrate on building a new chip design with lower development costs.
"For competitive reasons, the company will be unable to provide greater detail until 1H '99. The company has secured additional funding, the details of which cannot be provided at this time," the company stated.