Nvidia: "ATI's thrown in the towel"

Discussion in 'Graphics and Semiconductor Industry' started by Miksu, Jul 25, 2006.

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  1. Miksu

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    From VoodooExtreme:

    Parts from the interview:

    Derek Perez:
    Derek Perez:
    Full interview here.
     
  2. Jawed

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    Finally, some good ol' B$ from NVidia. Can't believe it took so long.

    Jawed
     
  3. _xxx_

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    From the business perspective, no BS at all there IMHO.
     
  4. Arwin

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    I'm not sure ... has ATI really stated they won't support Intel after the AMD partnership? Because I'm not convinced that would necessarily follow. What I do expect is that you may get configurations and motherboards that are integrated better, but otherwise ... I don't think ATI would turn down another console offering either even if the main processor in that one was, say, made by IBM. ;)
     
  5. Razor1

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    Intel might not support ATI ;) or hurt them purposefully, and Intel is a company that will do such things.
     
  6. Dave Baumann

    Dave Baumann Gamerscore Wh...
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    How so?
     
  7. Bouncing Zabaglione Bros.

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    Uhh, yeah. Ask Perez back in five years when AMD/ATi are doing all their own chipsets, CPUs and GPUs, and Intel is doing the same. Where is Nvidia going to be then? This isn't a case of Nvidia being the only independent behemoth towering over Intel and ATI, this is them being frozen out of the market. This is Nvidia's main competitor suddenly getting a lot bigger and getting the backing of one of their biggest core partners. Nvidia's only alternative (Intel) is pretty frosty towards Nvidia, and is about to come out competing directly in Nvidia's markets for chipsets and GPUs.

    In five years if AMD/ATI and Intel are producing their own CPUs, Chipsets and GPUs in their own fabs, how will Nvidia compete with that on price? How will they be able to keep up on process advancement when it's always Intel and AMD that are a year ahead of the TSMCs and UMCs of the world?
     
    #7 Bouncing Zabaglione Bros., Jul 25, 2006
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  8. _xxx_

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    You surely know something we don't? :razz:

    I assume the primary focus at ATI will be AMD platforms and everything revolving around that. High-end PC stuff aside and looking at AMD's business, there will be lots of work to do in the area of highly integrated stuff for smaller devices like handhelds, phones etc. around AMD tech. And then chipsets, IGP's, etc. I don't think there will be many resources left for any serious competitive development for Intel platforms or anything else outside the house for that matter.

    Just my guesses without any hard facts, of course.

    EDIT:
    That might happen as well in places, but I wouldn't expect any too harsh moves there. Also, don't Intel and AMD have some cross-licensing deals still going?
     
    #8 _xxx_, Jul 25, 2006
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  9. Razor1

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    Thats only if AMD/ATi relationship stands as it now in 5 years, thats alot of time, and a 5 billion dollar debt for AMD to come out of with smoking guns from Intel, and nV on either side. Its a merger of two companies in a temporary slump, its not the greatest of timings to be merging, the banks have already cut AMD's credit amount which might directly effect its new fab in NY.
     
  10. phenix

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    If there wont be any R700 then he would be right.
     
  11. _xxx_

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    Intel built gfx-cards, chipsets and IGP's for ages, did that destroy nV or ATI? No, since the offerings were crap. AMD/ATI will surely deliver much better stuff, but I dunno what it looks like for Intel. I've yet to see any kind of high-performing GXF from them and that won't change over night. And they also haven't had the top-performing own chipset for ages.
     
  12. Bouncing Zabaglione Bros.

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    You think this merger is being made and they are not looking at least five years into the future at where they want to be and what they want to be doing?
     
  13. Bouncing Zabaglione Bros.

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    Looks like that's changing. Conroe is a watershed for them after the deadend of the P4s. New high performance chipsets have recently been announced, and there's persistent rumours of a serious entry into the GPU market. This is Intel's big comeback, and they are coming back in a big way.
     
  14. _xxx_

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    I'll believe it when I see it, just that much. If Intel can build even a solid midrange gfx-card this or next year, I'm in for tar and feathers... :razz:
     
  15. Jawed

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    No, the primary focus of ATI will be graphics/video/multimedia.

    The bit of ATI that does chipsets will have AMD platforms as a primary focus.

    Don't forget ATI is far more diverse than NVidia, and in several (relatively minor, admittedly) product categories (like handheld) ATI has several years of market penetration that NVidia is only now seriously considering entering.

    And NVidia still has a "the margins are too low, we won't demean ourselves" outlook on slices of these product categories, which means that NVidia won't do top-to-bottom for customers, which means that NVidia isn't very attractive. NVidia likes to cherry-pick. That era will have to end.

    ATI on the other hand is customer centric (OEM), which is prolly a big part of why AMD would never have considered NVidia.

    It does look like Intel chipsets/IGPs will be a loss for ATI. The loss of laptops is, I think, where the big loss comes from.

    This provides NVidia with an opportunity to really turn the tables, since ATI's outsold NVidia 3:1 in laptops - plenty of growth there, subject to the laptop platform growth that AMD achieves in the same timeframe. With laptops still growing (though there was a recent quarterly hiccup), it's prolly the one area where NVidia stands to grow significantly.

    Perhaps fortunately for NVidia, Intel's plans for next-gen laptop IGP:

    http://www.theinquirer.net/default.aspx?article=33229

    look a bit warm...

    Jawed
     
  16. Rollo

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    I'd call this more a "friendly takeover" than a "merger".

    AMD actually climbed to 21% market share for the first time since 2001 in Q4, 2005, so their slump was likely imminent due to Conroe release.

    In any case, I don't think this takeover creates the industry "giant" some of you apparently think it does. AMD holds 17-18% of their market, ATI holds a significant amount of IGP/low end as always, but has never really dominated the high end except for the R300 years.

    I do think it makes sense for AMD, to want to offer motherboards and video along with their products, and I don't think we'll know the true ramifications of this for the high end discrete market for a couple years.

    If you're AMD and just went $2.4b into debt to make this happen, your first press release will not likely be "Big changes coming for ATI! We're scrapping their business model to bring it in line with ours!".
    You'd say "This merger of two strong companies allows us to advance the strengths of both!" because you need to maintain shareholder and market confidence.

    Time may prove me wrong, but companies who come to the point of selling controlling interest usually don't get to keep their business model.
     
    #16 Rollo, Jul 25, 2006
    Last edited by a moderator: Jul 25, 2006
  17. Dave Baumann

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    The dynamics of how the graphics card market has worked from an R&D standpoint don't change.

    How is that figure derived?
     
  18. Razor1

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    Of course they did, and I think they saw the only way to gain what they will loose with conroe is going with this merger it will slow the drop in market share until thier next gen CPU's come out. But I don't think they were expecting to get thier credit cut though (credit they need for the new fab, 2.5 billion on that 5 billion debt is and will be for fab building), since not many people outside of the involved parties had any real indication of the merger talks to be very serious.

    Intel will do just about anything to make sure AMD doesn't gain marketshare on them (seen very well with the anti-trust cases), and they have the technology and resources to make that happen unlike before when they only had resources. If this merger took place before conroe it would be a different story.

    Added to this, nV has the technology to keep up with ATi, and this just a + for nV as thier marketing department takes the pie home. AMD's marketing is also good, which will come in handy for ATi to some degree but again not as good nV's. And they aren't as good as Intel either.

    Intel will be increasing thier market share in PC's and notebooks for the next year or so, possible longer, if they decided to hurt AMD though ATi which they already started on by dropping ATI chipsets (don't know how far they will go though)

    And then you have lose on the server side, AMD has to execute perfectly if they want to slow down thier marketshare drop. AMD/ATi keep talking about in a year or so they will be gaining mareket share and each 1% of the business market is worth 300 mill, but what about in the interm where AMD can't compete?

    This is going to put a very hard line for AMD to make a discussion, losing market share and being in heavy debt is not a good place to be. As much as the in house chipset in important, its going to take time to get them out, and in this time is where we will see if this new company will suceed as it is now or fail, if they fail we will see them change thier focus on to what is most profitable.

    Rollo you are correct this really isn't a merger, its a buy out, AMD has complete control to do whats in the best interest of this new company, and in a way that is good, as ATi's management isn't the greatest. In a way its also bad, if they don't adapt fast enough to change as the GPU industry needs, time will tell this.
     
    #18 Razor1, Jul 25, 2006
    Last edited by a moderator: Jul 25, 2006
  19. Titanio

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    Can you really be sure? In 2 years? In 5 years? 10? Change is not going to happen all-of-a-sudden or may not even be intended initially. But change can often creep in quite innocuously in situations like these, and there's no guarantee that won't happen here too.

    My biggest concern is that indeed, AMD (and thusly now ATi's) biggest concern is competing with Intel. So I really think how things pan out past the near-term depends on the dynamics of that relationship, and that certainly could steer them away from a focus on high-end discrete R&D. Might not either, but looking forward things have gotten less clear and more complicated, with more potential for things to "go wrong" here, and that does unsettle people.
     
    #19 Titanio, Jul 25, 2006
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  20. _xxx_

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    Yes, but wait till we see where that R&D money goes and how much. And as said, you'll have so much more work "internally" in many different areas that it'll surely affect the resources needed for the development for other platforms. Priorities, nothing more than that.

    EDIT: I went through quite a few companies already and have been there in two mergers, thus the claims. The "bigger" brother always sets the rules. And this sounds very familiar, reflecting my experiences:
    I can also imagine AMD will relocate quite a few people soon and maybe even lay off some. Surely the marketing, sales, beancounters etc. will be cut down first.
     
    #20 _xxx_, Jul 25, 2006
    Last edited by a moderator: Jul 25, 2006
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