In a move that, unfortunately, doesn’t come as much surprise, Creative
has confirmed today that 3DLabs, who they purchased in 2002, will exit
the workstation PC market. Instead "3Dlabs will transition from the
shrinking professional workstation graphics market to focus on
portable handheld devices which require intensive media processing for
video, audio and increasingly powerful 3D graphics."

We’d heard last year of a “refocusing” of staff at 3DLabs Egham site
sometime last year, and Neil Trevett also turned up at NVIDIA sometime
ago as part of their handheld business. Although 3DLabs were heavily
involved in shaping the PC 3D market initially, especially with their
role in OpenGL, the workstation graphics market has become an
increasingly competitive place with NVIDIA and ATI being able to
leverage the vast resources they have for desktop graphics into other
markets, such as workstation, shrinking 3DLabs market share and
eventually making it too costly to continue development of high end
graphics.

http://www.beyond3d.com/