NVIDIA makes chips for video carts. Their latest chip, the TNT is one of the fastests on the marktet and sold quite well in both retail and OEM.
I think NVDA makes an excellent short. TDFX just bought STB, their most important client and link to the OEM world. Their second biggest client Diamond (DIMD) just linked up with SIII. That leaves only Creative (CREAF) as a major customer. Their chips are good, but I just don't think they will make it against ATI en 3dFX. They are also overvalues compared to the (stronger) competition
Diamond's deal with S3 is not going to affect their business with NVidia. Diamond has ALWAYS made a full range of video boards using all sorts of chips. NVidia represents the high end high performance stuff, while the s3 Savage stuff is going to be sold at the low-cost medium performance point, probably primarily to OEMs who can't justify $100+ for a video board on a $900 computer.
I totally disagree with your current profile of Diamond (3 months ago you would be absolutly correct) ; just read their recent qquarterly report in which they have made apledge to cut down the number of Graphics solutions .
I will admit that Diamond will continue to build a TNT board but only in respones to some of their key OEMs like Micron and only if they demand it.
Intel is bent on seeing the success of AGP4X and their recent joint agreement with S3 is evidence of this.