Nvidia vs ATI for Graphics Chips

NYT and WSJ have stories on the battle in graphics chips between Nvidia and ATI.

NYT: “In hopes of recapturing the clear advantage it let slip, Nvidia is counting on a new generation of its GeForce chips that it is introducing April 14 to make a big splash in the market. Until last year Nvidia was the overwhelming leader in making the chips that are used to improve the ability of personal computers to portray complex three-dimensional and fast-moving graphics images, a quality particularly prized by video game players. Moreover, it had an exclusive deal with Microsoft for the graphics processing chips used in the Xbox game machine. That all came undone last year when Nvidia placed an ill-timed bet on a new generation of chip-making technology that ended up reaching the market too late. At the same time, the company lost its Xbox contract to rival ATI when it refused to meet Microsoft’s stringent pricing demands…Both Nvidia’s new GeForce 6 family and ATI’s new product that will reportedly be named Radeon X800 – which the company says will be announced soon and should be in the stores roughly at the same time as Nvidia’s – will have more than twice as many logic transistors as the current state-of-the-art Pentium chips. The chips made by Nvidia and ATI compete primarily for the high-end gaming market, where consumers pay between $300 and $500 for add-in cards that yield accelerated graphics.”

WSJ: “both companies still are a long way from the industry’s ultimate goal — artificial worlds that are indistinguishable from reality. But in the hands of skilled programmers, the chips will help bring a new level of realism and emotional force in games by creating characters that are more convincing when they move, talk, laugh and cry. Over time, such chips are likely to inspire richer forms of entertainment, where story lines and character development are as important as action, that will appeal to broader audiences…Nvidia and ATI, which both have sales of about $2 billion and market capitalizations topping $4 billion, are longtime rivals in the graphics-chips business…Nvidia still accounted for 58% of the 23 million PC graphics chips sold for desktop PCs in the fourth quarter of 2003, says industry watcher Mercury Research, compared with 38% for ATI…These latest Nvidia and ATI chips are narrowing the gap in image quality between games and movies. A key reason is a set of programming conventions, defined by Microsoft, that assigns a tiny piece of software to define the light and shade on each of the thousands of picture elements, or pixels, that make up a display screen.”

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Rajesh Jain

An Entrepreneur based in Mumbai, India.