Michael Best & Friedrich, LLP
Attorneys at Law
100 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-4108
Fax (414) 227-0656
Telephone (414) 271-6560
Writer's E-Mail Address:
jabusch@mbf-law.com

January 2, 1998

Honorable Vaughn R. Walker
United States District Judge
Northern District of California
450 Golden Gate
P.O. Box 36060
San Francisco, CA 94102

Re:	Rudolf v. S3, Inc. Case No. C-97-4066 VRW Zinberg v. S3, Inc. Case No. C-97-4079 VRW Sanchez v. S3, Inc. Case No. C-97-4084 VRW

Dear Judge Walker:

The undersigned represents the State of Wisconsin Investment Board ("SWIB") which purchased stock of S3, Inc. ("S3") during the class periods alleged in the above-referenced cases. SWIB currently holds approximately 7.6% of the outstanding shares of S3. As such, SWIB believes it is among the largest of S3's shareholders.

SWIB writes this letter to advise the Court that it will not seek lead plaintiff status under the Private Securities Litigation Reform Act in any of the above-referenced matters. This decision was made after a series of discussions with some of the counsel in the above cases and after due consideration of SWIB's role as both a class member and a continuing equity holder. Notwithstanding this decision, SWIB is very interested in the course and the outcome of the cases. As this Court discussed at length in In re California Micro Devices Securities Litigation, 168 FRD 257 (N.D. Cal 1996), institutional investors in general and continuing equity holders in particular are keenly interested in the amount and the sources of any settlement or judgment.

In light of the above, SWIB requests that pursuant to Rule 23(d) FRCP and the Court's inherent powers, the Court order that the parties copy SWIB's counsel with all the pleadings and with any other documentation served on or provided to the parties. In addition, SWIB asks that the Court allow it to be heard on the selection and compensation of Lead Plaintiff and class Counsel. Further, SWIB that the Court order that it be included in any settlement negotiations so that SWIB's input can be considered prior to formal submission of any settlement to the Court and the Class. SWIB also reserves the right to seek intervention in the litigation as a party in interest at a subsequent point if necessary. In the event SWIB's participation or monitoring provides a benefit to the class SWIB may request the opportunity to present its fees and expenses to the Court for payment out of any recovery.

SWIB is aware that the cases have been set for a Case Management Conference on January 22, 1998. If the Court deems it appropriate, SWIB will appear in person or by telephone at that conference.

Thank you for your consideration.

JAB:cmv