A 2D chip supplier that tried for VR 16 years too early
In the mid-1990s two major developments were taking place. One was the explosion of 3D graphics chip companies, and the other was the emergence of virtual reality from the labs to industry.
In 1990, twenty companies were making or had declared they would make a 3D graphics chip. By 1996 the number of suppliers exploded to 70. And by 2000, the number of suppliers had dropped to 12 due to the unforeseen complexity of developing such a chip, and the impact of the collapse of the Internet bubble.

Figure 1 : The rise and fall of 3D graphics chip suppliers
Around 1990 the notion of virtual reality began to get popular. Prior to that the virtual reality industry mainly provided VR devices for medical, flight simulation, automobile industry design, and military training purposes from 1970 to 1990. By the end of the century things had gotten quiet as the dream of VR failed to be realized to the level of its promise.
In 1989 S3 was founded and began development of a 2D graphics controller. In 1991 the company introduced it S3 911 chip, as a Windows (or GUI) accelerator. The company did very well and introduced a string of 2D controllers.
With the introduction of the Sony PlayStation, and then the Nintendo 64 with 3D capability, by the mid-1990s consumers and OEMs began to demand 3D functionality from PC graphics cards. S3 responded to the demand and in 1995 introduced the S3 Virtual Reality Graphics Engine (ViRGE) graphics chipset; one of the first 2D/3D accelerators designed for the mass market. S3 sought to capture two market movements at once—VR and 3D.
The ViRGE, or 86C385 was a mediocre 3D controller, but did well in the market because of its low price and excellent 2D capabilities, which at the time was still the major market in terms of applications—i.e., games.

Figure 2: S3’s ViRGE 86C385 3D graphics board (Source VGA Legacy)
The S3d Engine provided 2D acceleration for Windows applications performance and a high-performance 3D rendering engine for games and other interactive 3D applications.
It incorporated key Windows accelerator functions of BitBLT, line draw and polygon fill. 3D features included flat shading, Gouraud shading and texture mapping support. Advanced texture mapping features included perspective correction, bi-linear and tri-linear filtering, MIP-Mapping, and Z-buffering. The S3d Engine also had direct support for utilizing video as a texture map. Those features provided the most realistic user experience for interactive 3D applications at the time.
Other advanced features of the S3d Engine included S3’s proprietary compressed texture formats which the company claimed provided improved performance and reduced memory requirements. It also provided support for S3’s MUX buffering feature, which allowed for Z-buffering support with no additional memory requirement.
S3 was one of the first to offer a Streams Processor. The streams processor provided the stretching and YUV color space conversion features required for full screen video playback with both software CODECs and hardware MPEG-1 sources.
The streams processor allowed simultaneous display of graphics and video of different color depths. For example, it was possible to display 24 bpp-equivalent video on top of an 8-bit graphics background. That saved memory bandwidth and storage capacity while permitting higher frame rates.
The chip offered what S3 called its Scenic Highway. It allowed lowest cost direct connection to S3’s Scenic/MX2 MPEG-1 audio and video decoder as well as video digitizers such as Philips’ SAA7110/SAA7111.
High-Performance Integrated DRAM-based 2D/3D Graphics and Video Accelerator
S3d Graphics Engine Features
S3 Streams Processor Features
S3 Scenic Highway Interface
High Screen Resolution (Non-interlaced) Support
High-Performance Memory Support
Non-x86 CPU Support
Industry-Standard Local Bus Support
PCI Bus Mastering for Display List Processing and Video Capture SupportMultimedia Support Hooks
Full Software Support
Green PC/Monitor Plug and Play Support
Extensive Static/Dynamic Power ManagementIndustry-Standard 208-pin PQFP package
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Figure 3: The S3 ViRGE 86C385 block diagram
The S3 ViRGE provided linear addressing of up to 4 MBytes of display memory. Linear addressing of more than 64 KBytes requires that the CPU be operated in protected mode. Linear addressing is useful when software requires direct access to display memory. ViRGE offered two linear addressing schemes. The old method could be used when memory-mapped I/O (MMIO) is disabled or with the old MMIO method. The second was used in conjunction with the new MMIO method. The new MMIO method for ViRGE offered a 64-MByte addressing window.
The company went public in 1993, and then built three towers near highway 101, but the industry was shifting, and S3 tried to maintain growth by developing additional chips, such as an audio chip. In 1999 the company was in financial trouble, partially due to the collapse of the internet bubble and largely due to ascendancy of Nvidia and ATI; the number of 3D chip companies was dropping rapidly. Looking for other markets and financial support S3 formed a partnership with Taiwan-based Via Technologies. S3 would adopt its 3D chip technology to an integrated graphics chip (IGC) made by Via. The IGC was made in an 0.18-micron process and would work with AMD and Intel x86 processors and provide the North-bridge functions. In fact, the original business plan of S3 in 1989 was to build core logic parts (that was partly due to the experience the founders had from their C&T days). And a 10-year Intel IP swap in 1998 gave S3 access to Intel buses and processor I/O.
At the time, S3 held a 16% ownership in UMC, a semiconductor fab company, and UMC was making the IGC giving S3/Via a price advantage.
Still trying to find a path forward, in late 1999 S3 bought one of its OEM add-in board customers, Diamond Multimedia. That just about ended all the companies other AIB partnerships, damaging its cash-flow needs and causing it other losses with PC OEMs.
A month later and almost out of cash, S3 announced the formation of S3-Via, a joint partnership. At the same time the company was developing a music player it would show at the Comdex conference.
Wanting to buy some business in early 2000 S3 considered acquiring what was left of Number Nine hoping it would pick up the IBM deal Number Nine had. At the last minute S3 pulled out of the discussions, and Number Nine filed for bankruptcy. Rumors circulated that cash strapped S3 would be acquired by Via. In the spring of 2000 Via did acquire S3 (for $320 million) in a convoluted deal. And the S3 team began developing an Internet Appliance. It did and became SONICblue and in 2003 it filed for bankruptcy.
In July 2011, HTC Corporation announced it would buy the VIA Technologies stake in S3 Graphics, thus becoming the majority owner of S3 Graphics, and signifying the last chapter in the company’s history. And although the S3 ViRGE which was named for VR was never used in any VR devices or applications, HTC became one of the leading VR headset suppliers.
Jon Peddie, is a recognized pioneer in the graphics industry, president of Jon Peddie Research and named one of the most influential analysts in the world. He lectures at numerous conferences and universities on topics pertaining to graphics technology and the emerging trends in digital media technology. Former president of Siggraph Pioneers, he serves on advisory boards of several conferences, organizations, and companies, and contributes articles to numerous publications. In 2015, he was given the Life Time Achievement award from the CAAD society. Peddie has published hundreds of papers, to date; and authored and contributed to 11 books, His most recent, Ray Tracing: A tool for all.