S3 said it has received offers from several companies for the semiconductor business. The company hired Lehman Brothers in January to help it explore options for splitting the Internet device business, which includes the Rio appliance for downloading and playing MP3 music files from the Web, from its business that makes graphics chips and cards used in personal computers.
The Santa Clara, Calif.-based company is in a race with PC graphics-chip and card makers like Nvidia and ATI Technologies to produce more advanced chips at cheaper prices to run graphics-intensive software such as games and video.
The graphics chip business has become hypercompetitive, overcrowded and largely unprofitable for a number of companies in recent years. A leader in the mid-1990s, S3 saw its profile skid in 1997 and 1998 as new generations of more powerful graphics chips began to dominate the market. S3's sales have recovered in the past year, however.
Copyright 2000, Bloomberg L.P. All rights reserved.
News.com's Michael Kanellos contributed to this report.
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