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NeoMagic's sales jump 81 percent

The graphics chipmaker reports a stellar third quarter as more notebook makers choose its integrated chips.

Notebook PC makers have turned more and more to graphics chips from NeoMagic, and it is now reaping the financial rewards.

The graphics chipmaker today reported net sales for the third quarter of fiscal 1999 of $67.4 million, an increase of 81 percent compared to $37.1 million for the third quarter of fiscal 1998.

The sales figure is also an increase of 26 percent compared to $53.4 million for the second quarter of fiscal 1999.

Net income for the third quarter of fiscal 1999 was $8.6 million, or $0.33 per share. Net income for the same period in 1998 was $6.5 million, or $0.25 per share.

"We attribute our recent growth to the acceptance of our new 256-bit architecture, and proliferation of our multimedia accelerators into multiple product lines at major PC manufacturers," said NeoMagic's President and CEO, Prakash Agarwal, in a statement.

Notebook manufacturers are using more powerful graphics chips across their product lines in order to establish parity with desktop models which typically carry the most powerful graphics processors. Companies such as IBM, Dell Computer, Hewlett-Packard, and Gateway use NeoMagic chips in their notebooks.

In June, NeoMagic launched the industry's first 256-bit multimedia family, the MagicMedia256 line. Generally, the wider the data path, the better the performance. Most chips today come with a 64- or 128-bit data path.

This line also offers AGP graphics, acceleration for DVD video playback, and is also the first chip to integrate video and graphics with digital audio, eliminating the need for a separate audio chip, according to the company.

NeoMagic extended its lead in the second quarter of 1998 for notebook PC multimedia graphics accelerators, according to a report from In-Stat. NeoMagic competes with ATI Technologies, Trident Microsystems, and S3, among others.

During the second quarter of 1998, NeoMagic captured 54 percent of the total notebook graphics market, compared to a 49 percent share in the first quarter, In-Stat reported.

After the main microprocessor, graphics chips are the most critical piece of silicon in personal computers today. These chips handle the manipulation of images users see on their computer screens and are increasingly important as computer interfaces and 3D games become more sophisticated and demanding.