Originally posted by: BenSkywalker
nVidia going to be hurt worse than ATI?
Tomorrow is a holiday so most people will have the day off. nVidia will come back to work on Friday, likely start at 9:00am and you know what is highly likely to have happened by the time 9:01am rolls around? They would have made more profit then AMD for all of 2009. It may sound bad, but nV has, for some time now, been making more profit per minute then AMD has per year.
With that in mind, how would nV be hurt more by a price war then AMD? Last quarter was a rough one for nV, didn't make their normal $200-$300 million in overall gains because they took such a big loss on the billions in cash they have invested. Their graphics division was showing margins in the 40% range, that is HUGE. Without a die shrink, without retooling for new parts nV could drop the prices on their boards a very hefty amount and still remain quite profitable.
Since nVidia's new 260/280 cores are huge and especially with a 512 Bit memory interface, they may get hit the worse in a new price war? Especially since its no secret that their 260/280 cores cost alot more than ATI's?
What is the price difference on ATi's more expensive RAM choice? You factor it all out and you may be surprised just how close the actual costs are on the different boards right now, even the $60 boards compared to the $400 ones
That's one element I thought was brilliant about ATI's choice.
They picked GDDR5, which can go down in price.
NV picked 512-bit bus with cheaper RAM, which gives less scope for a price reduction due to PCB costs being hard to slim down.
The more time passes, and the cheaper GDDR5 gets, the better ATI's position to reduce prices without hurting themselves too much.
AFAIK NV don't have quite such a luxury on the board/RAM side, unless they do a redesign with slower memory bus and also switch to GDDR5, since PCB costs will remain fairly flat, and so will RAM prices (I would assume GDDR3 is close to bottom).
NV can save quite a lot with smaller GPU's though, and potentially further savings with cheaper components in the future through lower power requirements.
ATI have put themselves in a good position, but this whole thread is (IMO) a bit silly, as for the whole stock issue, ATI has little to do with overall AMD performance (except for causing writedowns on the value), so the better question would be "Are NV going to hurt due to this price war?", to which the answer is probably yes, mainly because their competitor is undercutting them and stealing sales, but IMO that's already been factored into the current stock price and outlook, so there shouldn't be too much of a fall based on the last 6 months, because there's already been a big fall, and market/economy factors are more of a consideration than margins on high end products.
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