Remember S3 Graphics, makers of graphics chips (GPUs)? No? Well, it may seem hard to believe now, but over 10 years ago, S3 was the market leader for 2D-only GPUs. But then lost market dominance to ATI and nVidia when the industry moved to 3D.

Since the graphics portion of the company was acquired by VIA Technologies in early 2001 to make integrated GPU cores for their chipsets, S3 got very quiet and pretty much abandoned both the discreet/graphics card/retail and the integrated/OEM markets. That is until the end of last year, when VIA spinned off S3 onto an independent company, according to S3's product marketing manager, Benson Tao (pictured) that I met at the GDC.

S3 has now regrouped, and with ATi is now the only graphics chip company to launch Microsoft DirectX 10.1 compatible chips/drivers.

"We've come a long way. For a time, we were several years behind ATI and nVidia. And in this very rapid and changing industry you don't get to survive long at this pace. But we did and now we're just a few months behind ATI... We're back!", said Benson Tao.

The company is indeed far from dead, employing 150 people in its headquarters in Fremont, CA and more than 400 in China (Shanghai and Shenzhen). Tao even compares the latest S3 430GT chips with competing GPUs, saying they are up 10 to 15% faster!

"The 430GT is in the same market segment than the Nvidia 8400 and the 9x series, and then the 3450 and 3470 from ATI. So if you look at apples to apples comparison, engine clock speed, memory clock speed, different memory types, performance is in the range of 10 to 15% higher".

With its latest Chrome 400 series, S3 hopes to make a serious dent into the retail graphics card market and also attract OEMs. And looking at the car demo in S3's booth at the GDC, it surely looks like it may get a chance. Also, according to Tao, HP is already using S3 GPUs in PCs in China and might extend that relationship to other market segments. My guess is that S3 is much more aggressive and willing to make more concessions in terms of price than its competitors to win a customer.

S3 is also playing in the PC mobile market with an ultra-low power solution.

"Compare to other makers, the power consumption [of the mobile chips] is at least 2-3 watts below our competitors. And if you look at synthetic benchmarks like 3DMark06, the average score is probably 300-400 points higher"

With S3 back in the game, the graphics chip market is finally becoming more exciting!