<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from S3
Incorporated Condensed Consolidated Financial Statements for the period ended
September 30, 1996 and is qualified in its entirety by reference to such 10-Q
filing.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
       
                             
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JUL-01-1996
<PERIOD-END>                               SEP-30-1996
<EXCHANGE-RATE>                                      1
<CASH>                                         130,808
<SECURITIES>                                    13,200
<RECEIVABLES>                                  104,831
<ALLOWANCES>                                     2,026
<INVENTORY>                                     52,865
<CURRENT-ASSETS>                               328,367
<PP&E>                                          44,298
<DEPRECIATION>                                  18,402
<TOTAL-ASSETS>                                 446,782
<CURRENT-LIABILITIES>                           81,918
<BONDS>                                        103,500
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                       159,865
<OTHER-SE>                                      82,237
<TOTAL-LIABILITY-AND-EQUITY>                   446,782
<SALES>                                        119,440
<TOTAL-REVENUES>                               119,440
<CGS>                                           72,824
<TOTAL-COSTS>                                  101,579
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                   600
<INTEREST-EXPENSE>                                 338
<INCOME-PRETAX>                                 18,138
<INCOME-TAX>                                     6,350
<INCOME-CONTINUING>                             11,788
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    11,788
<EPS-PRIMARY>                                     0.23
<EPS-DILUTED>                                     0.23