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Technology Stocks : ATI Technologies in 1997 (T.ATY) -- Ignore unavailable to you. Want to Upgrade?

To: Marc who wrote (3440)	5/25/1999 12:34:00 PM
From: Marc	Read Replies (1) \| Respond to of 5927

ATI, Nvidia adopt graphic-logic integration strategy By Will Wade EE Times (05/24/99, 11:08 a.m. EDT) SAN MATEO, Calif. — Two graphics-chip vendors have forged separate partnerships that will put them in the thick of the trend toward graphics-with-logic device integration for low-cost PCs. Nvidia Corp. and ATI Technologies Inc. will combine their graphics accelerators with the north-bridge elements of PC chip sets in implementations that could ship by the end of the year. The moves reflect a growing awareness of the low-end PC's rise to dominance in the mainstream computing segment, where price increasingly holds sway over performance. Nvidia (Santa Clara, Calif.) has licensed its graphics technology to Taiwan's Acer Labs Inc. The first product to emerge from the companies' partnership will not bear Nvidia's name, but the company does expect to market its own line of integrated graphics-with-core-logic devices beginning in 2000, said Michael Hara, Nvidia's vice president of corporate marketing. "Integration makes sense in some markets," Hara said. "We recognize that the midrange and low-cost PC market is very important." ATI (Thornhill, Ontario) is working with Reliance Computer Corp. to develop a similar product, aimed at PCs in the $500 to $800 range and designed for use with Intel Corp.'s Pentium II and Pentium III as well as other processors. ATI said it will sample the part in the second half. The two graphics-chip vendors have jumped on an increasingly crowded bandwagon. S3 Inc. announced its own partnership last month with Via Technologies Inc.; Trident Microsystems Inc. has been collaborating with Via since last year. Also in April, Intel released its own integrated chip set, the 810, featuring a graphics accelerator in the north bridge. And Silicon Integrated Systems Corp. last year rolled out integrated graphics-with-logic devices that support both Slot 1 and Socket 7 systems. "All of these companies are doing the exact same thing," noted Jon Peddie, president of graphics-market research firm Jon Peddie Associates. "Integrating graphics with the north bridge allows the graphics engine to reach into the system's main memory without messing up the operating system. I have been predicting this trend for more than two years, and we are definitely going to see more of it." For Nvidia, the move represents a shift in marketing approach. Hara said the company has previously focused on maximizing graphics performance, with discrete chips designed only for desktop systems. Embracing an integrated design means sacrificing some performance. Hara said the goal for the new product line will be to ship more units. ATI, for its part, considers its integrated chips for low-end PCs the final plank in its strategy to offer products for every segment of the computing market. Three trends are converging to drive the integration of graphics and core logic. As PC prices plummet, OEMs are looking to shave the bill of materials in any feasible way. Cutting a few dollars off a $30 graphics engine may have seemed insignificant when PCs were selling for $2,500, but with prices sinking below $400 now and no floor in sight, even a slight price cut can become an important competitive advantage. At the same time, graphics-engine performance continues to rise. While Peddie and most chip-company executives agree that a discrete component will always deliver better imaging capabilities than an integrated chip, they also agree that integrated graphics chips are good enough now to satisfy most users. Peddie predicts that only the most die-hard gaming fans — those who demand ultrafast, 3-D performance — will remain dedicated to discrete graphics chips. "In the overwhelming majority of the market, 'good enough' is exactly right for the user," he said. Finally, as 3-D graphics rise to dominance, the need for more memory in the graphics engine is becoming a problem. Some vendors have already discovered that embedded DRAM lacks sufficient storage capacity for 3-D images, which require full texture as well as significantly more information on a polygon's position relative to other objects. Although using more discrete memory chips on a graphics card is one solution, integrating graphics onto the core logic lets designers tap the system's main memory as well. Shared memory That's exactly what ATI is planning, with a design it calls shared memory architecture (SMA). Reliance produces chip sets for the server market, and its products are known in part for their fast memory access, which could be a benefit for ATI chips that require fast memory performance. The partnership also makes business sense. "Reliance is a good match for ATI because [Reliance is] one of the few companies that hasn't tried to enter the integrated graphics market," said Peter Glaskowsky, senior graphics analyst for the Microprocessor Report. But Glaskowsky also flagged some bumps in the path to integrated graphics-with-logic devices. Merging a graphics engine into the chip set makes it impossible to upgrade the system's video capabilities and limits sales in the aftermarket. And these are chips that do not produce high profits to begin with. "These are not going to be high-value parts," he said. "Most people who are trying to make them are doing it because they are afraid they will get squeezed out of the market." Further, OEMs tend to be wary of the integrated products because the parts eliminate second sources and tie the OEMs' fortunes to a single chip-set provider. Many OEMs are accustomed to picking a chip set early in the design process and selecting the graphics solution as a differentiator toward the end of the design cycle. Such a strategy can also be a last-ditch method to deliver an adequate system on time by masking poorly functioning components with a powerful graphics accelerator until system bugs are worked out. Integrating graphics and core logic means the OEMs must pick the graphics capabilities along with the chip set, and that denies them some flexibility. Despite those issues, analyst Peddie is confident the SMA approach — which he said is identical to the unified memory architecture (UMA) seen a few years ago — will take off. "This is an idea whose time has come," he said. "Discrete graphics chips are going to disappear in the value-PC segment, and companies that want to stay in that market are going to have to adopt this technology." A LOT OF NEW INFORMATION ....