The company was founded by Chong Moon Lee and H. H. Huh, who acted as the technical designer. Diamond Multimedia later merged with S3, Incorporated in 1999 after a long-time cooperative business arrangement, when S3 decided to expand their business from producing graphics chipsets to manufacturing retail graphics cards. The move paralleled the 1999 3dfx purchase of STB Systems, which changed 3dfx from a graphics chipset supplier to companies including Diamond, into a vertically-integrated graphics vendor and direct competitor to S3. However, the first major product after the merger, branded as the S3 Savage 2000, was a commercial failure. Growth in the add-on sound card market, also an ongoing Diamond business, was tempered by the 2000 bankruptcy of Aureal Semiconductor and subsequent asset purchase by vertically-integrated Creative Technologies.