Fascinating Story on the RV770

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cmdrdredd

Lifer
Dec 12, 2001
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Originally posted by: chizow
Originally posted by: Janooo
Originally posted by: chizow
Pretty good article, a bit disappointing as there wasn't much on how RV770 was so much better than its late and underwhelming predecessors. I would've been more interested in reading what specific areas of the GPU they fixed. I also agree that more info on RV870 would've been nice.

Didn't see much in there about pricing, as to why ATI didn't charge more for a high performing part, sounds like they just targetted price points without considering the competition's pricing. Sure its great for consumers, but it sure isn't helping AMD's bottomline and may ultimately hurt them in the long run.

Also no mention of ATI's very public driver problems. Considering both Anand and Derek have spent considerable space covering monthly driver issues, I'm a bit surprised he didn't directly confront them to affect change.

There is no way you can support this statement. Please, stop spreading FUD.

How is charging less for a part that is competitive at a higher price point helping their bottom-line, especially since they once again posted a loss in the last quarter? Its easy to substantiate my statement about it ultimately hurting them, as they're not maximizing profits on a winning part now which will squeeze them down the line if/when they don't have a winning part. Even the article acknowledges this. But hey, its not like AMD has screwed things up in the past when they had a winner on their hands (see: Athlon 64 vs. P4).

because if the 4870 performs better than Nvidia's mid range and very close and sometimes better than the high-end part and is cheaper than both, you steal sales.
 

cmdrdredd

Lifer
Dec 12, 2001
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Originally posted by: aldamon
Originally posted by: Creig
Sure they posted a profit. But you and I both know it's substantially less than it would have been if AMD had not released the 48X0 series. And the GT200 is not Nvidia's only product. They have chipset sales, G92 sales, mobile products, etc. So the GT200 could still be selling either at cost or actually below cost and Nvidia could still show a profit. Nobody (except you) is denying that the GT200 is a large, expensive chip to produce. Whether or not Nvidia is showing much (or any) profit from them is information that's unavailable to us. And I doubt Nvidia would want to share it, either.

What chizow is saying is that those potential profits have evaporated. They haven't gone to AMD because they priced their cards too low. They've essentially undercut themselves by being so aggressive. They can't keep doing that and expect to survive. I love it as a consumer, but it's not smart. Remember, AMD paid $5.4 billion for ATI. Expectations are probably higher than a profitable quarter once in a while.

How the hell does anyone know what it costs ATI to manufacture these chips? Nobody except they do and you're speculating that a company would sell below cost? Ridiculous.

They marketed the 4870 to compete with the GTX260 and it actually beat it most of the time. And it came close and overtook the GTX280 in a couple situations too. They could sell it cheaper, or else they wouldn't have.
 

cmdrdredd

Lifer
Dec 12, 2001
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Originally posted by: chizow
Originally posted by: Creig
Sure they are. But they also have more room to lower prices to due a less expensive/higher yield GPU.
The GPU might be smaller, but that doesn't mean it costs less. Nvidia undoubtedly enjoys volume pricing and if you look up TSMC's revenue by partner, Nvidia is at the top, by far. There's also other factors to consider like RAM price along with high-end PWM modules used on the 4870s that weren't seen on any parts prior.

Sure they posted a profit. But you and I both know it's substantially less than it would have been if AMD had not released the 48X0 series. And the GT200 is not Nvidia's only product. They have chipset sales, G92 sales, mobile products, etc. So the GT200 could still be selling either at cost or actually below cost and Nvidia could still show a profit. Nobody (except you) is denying that the GT200 is a large, expensive chip to produce. Whether or not Nvidia is showing much (or any) profit from them is information that's unavailable to us. And I doubt Nvidia would want to share it, either.
Yep, they posted a profit, which is a far cry from the doom and gloom you and others were spouting about losses due to the high chip price per GT200. Yes they have other businesses but the discrete GPU market is still the overwhelming portion of their revenue, @75% I believe. You think that entire 800M in quarterly revenue is coming from $60AR 9600GSOs?

Like I said before, there's no way they're taking a loss on a GTX 260 at $300 and there's certainly no way they're going to price a C216 even more aggressively around $200 in hopes of selling EVEN MORE parts if they're taking such a huge loss. This isn't Sony or MS with consoles hoping they make their money back with game attach rates, they're simply not taking $100 loss per card and posting a profit. PERIOD.

I think you and others grossly overestimate how much one of these parts actually cost to make and fail to see the majority of the margin is just reinvested into R&D, which helps ensure the quality of future products. Its a concept AMD has never been able to grasp and a notion the consuming public has never been able to accept: paying a premium for high-end AMD parts.

I said no such thing. I said that by pricing their cards the way they did, they ended up taking away sales from Nvidia. That's a far cry from "had to undercut and steal in order to sell parts". I'm sure that ATI's 48X0 series would have sold on the strength of their benchmarks alone, just not in the same volume they did at the prices they were actually released at. Nice try, though.
  • Originally posted by: Creig
    Let's see, price it higher and try to compete directly with Nvidia for sales. Or... Price it lower, steal sales from Nvidia, garner enthusiastic public support for offering low cost/high performance cards while simultaneously forcing Nvidia to cut their own prices, drastically reducing (or eliminating) Nvidia's expected profit margin on an already expensive die.

Uh, ya. Sounds like you're a lot more confident than ATI was, or they wouldn't have undercut the market so drastically from the outset.

Nvidia's GT200 is simply more expensive to make than the RV770 due to its process size, number of transistors and yield. This means that ATI can undercut Nvidia while maintaining a higher profit margin. It's simple economics.
Already covered, simple economics leave you with the impression a graphics chip costs $200.

AMD is more than just their graphics division. Which, by the way, IS showing a profit.
Computing Solutions division is showing a profit too if you're going to use Operating Income as a metric, but then again that's not what's showing on their bottomline.

Riiiggghhhttt... Whatever. :roll:

When you and Wreckage are done derailing the thread, perhaps we can get back to discussing the article.
Rofl, this topic was derailed because I correctly pointed out RV770 still wasn't enough to turn a profit for AMD and a few like yourself took exception to it.

You are putting the Graphicws division in with the CPU division and let me tell you, if Nvidia was competing against Intel in the CPU market they would be dominated as well.
 

cmdrdredd

Lifer
Dec 12, 2001
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Originally posted by: akugami
Originally posted by: chizow
Originally posted by: aldamon
Originally posted by: Creig
Sure they posted a profit. But you and I both know it's substantially less than it would have been if AMD had not released the 48X0 series. And the GT200 is not Nvidia's only product. They have chipset sales, G92 sales, mobile products, etc. So the GT200 could still be selling either at cost or actually below cost and Nvidia could still show a profit. Nobody (except you) is denying that the GT200 is a large, expensive chip to produce. Whether or not Nvidia is showing much (or any) profit from them is information that's unavailable to us. And I doubt Nvidia would want to share it, either.

What chizow is saying is that those potential profits have evaporated. They haven't gone to AMD because they priced their cards too low. They've essentially undercut themselves by being so aggressive. They can't keep doing that and expect to survive. I love it as a consumer, but it's not smart. Remember, AMD paid $5.4 billion for ATI. Expectations are probably higher than a profitable quarter once in a while.

Exactly. And this is the bed they're going to have to lie in, even when they don't have a winning part. If people don't see cause for concern here I just don't know what to tell you.

Economies of scale. I can make $200 from a $500 MSRP product but I can only sell one of them per 1000 people or I can make $50 per product with a $350 MSRP and sell 10 of them per 1000 people. Just because AMD (or nVidia) is making less per individual product does not mean they are making less money overall. Business 101 FTW.

The fact is that with similar performing video cards, it costs less for AMD to make said video card than nVidia. What we have is nVidia being FORCED to lower their MSRP and making less money to stay competitive while AMD is making the money they had expected to with these parts. Card for card, I believe AMD is making the same or more money off each card in the same price range as their nVidia counterpart. Likely more. I'm sure AMD factored in a healthy profit to each video card in arriving at the MSRP. How much? No one knows. Much like the cost of manufactoring nVidia (or AMD) cards, that is info we simply do not have.

Exactly, remember when a 8800gtx was about $600?
 

chizow

Diamond Member
Jun 26, 2001
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Originally posted by: akugami
Economies of scale. I can make $200 from a $500 MSRP product but I can only sell one of them per 1000 people or I can make $50 per product with a $350 MSRP and sell 10 of them per 1000 people. Just because AMD (or nVidia) is making less per individual product does not mean they are making less money overall. Business 101 FTW.

I guess they didn't teach you in Business 101 that your $500 MSRP part and $350 MSRP are THE SAME part before some self-imposed neutering. The article covers this as well, except they call it "Harvesting" or "Binning" rather than "self-neutering". Nvidia fully understands economies of scale when offering a high range part, which is why they have no problems selling a nearly identical part at a fraction of the price that caters to a broader market. This simply isn't an option for AMD if they price at $350 to begin with, the only option is to dual-GPU for a similar high-end part.
 

chizow

Diamond Member
Jun 26, 2001
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Originally posted by: cmdrdredd
Exactly, remember when a 8800gtx was about $600?
Yep, and the 8800GTX proved the market will pay for performance.
 

cmdrdredd

Lifer
Dec 12, 2001
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Originally posted by: chizow
Originally posted by: cmdrdredd
Exactly, remember when a 8800gtx was about $600?
Yep, and the 8800GTX proved the market will pay for performance.

Not when there is a reasonable alternative. At the time there was none. When ATI released a competing product, bam...reasonable prices again. The same thing happened with Intel a while back. Then AMD actually had a CPU worth something and Intel was forced to change their price scheme.
 

chizow

Diamond Member
Jun 26, 2001
9,537
2
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Originally posted by: cmdrdredd
Originally posted by: chizow
Originally posted by: cmdrdredd
Exactly, remember when a 8800gtx was about $600?
Yep, and the 8800GTX proved the market will pay for performance.

Not when there is a reasonable alternative. At the time there was none. When ATI released a competing product, bam...reasonable prices again.
Not going to rehash this age old argument, because frankly, its boring. Look up the history of video cards at launch. You'll see quite a few at $500+, including many by ATI (X1900XTX, X800XTX etc)
 

cmdrdredd

Lifer
Dec 12, 2001
27,052
357
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Originally posted by: chizow
Originally posted by: cmdrdredd
Originally posted by: chizow
Originally posted by: cmdrdredd
Exactly, remember when a 8800gtx was about $600?
Yep, and the 8800GTX proved the market will pay for performance.

Not when there is a reasonable alternative. At the time there was none. When ATI released a competing product, bam...reasonable prices again.
Not going to rehash this age old argument, because frankly, its boring. Look up the history of video cards at launch. You'll see quite a few at $500+, including many by ATI (X1900XTX, X800XTX etc)

Yes, but look at recent times. Nvidia had no competitor in reality so they charged whatever they wanted. It sucked, you have to admit it. When the sum of your components are less than the cost of your video card that's a problem IMO lol. now they have competition, and prices are reasonable. Now you can get real performance cards for ~$250. For quite a while you either forked over your paycheck or you suffered with slow cards at the midrange.
 

Creig

Diamond Member
Oct 9, 1999
5,171
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Originally posted by: chizow
Yep, and the 8800GTX proved the market will pay for performance.

You're more than welcome to go pay Nvidia $650 for a GTX280 if you'd like. I'm sure they wouldn't mind the extra revenue. The rest of us will be happy with the lower prices all around that resulted from the release of the 48X0 series.

In fact, since you're so bored, we'd be more than happy if you stopped this thread crapping entirely. You came in here and started going on about ATI drivers and pricing when this thread is about the interview with the AMD engineers responsible for the RV770.

 

JSt0rm

Lifer
Sep 5, 2000
27,399
3,947
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this is why i never come into the videocards forum anymore. I can't do anymore then scan over all the bickering. Nvidia sure has the noise machine on full blast. It would be nice to just read discussion related to that very well written article.
 

ViRGE

Elite Member, Moderator Emeritus
Oct 9, 1999
31,516
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This isn't a financial thread, guys. If you want to argue over who's profitable take it to another thread.

-ViRGE
 

solofly

Banned
May 25, 2003
1,421
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Originally posted by: ViRGE
This isn't a financial thread, guys. If you want to argue over who's profitable take it to another thread.

-ViRGE

That's right, give'm a kick in the ass...;)

Nice article btw...
 

WelshBloke

Lifer
Jan 12, 2005
30,329
7,985
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Originally posted by: SlowSpyder
Originally posted by: WelshBloke
Originally posted by: Wreckage
Originally posted by: chizow

Sure they did okay, but they could've done better. All they managed to do was lower NV's margin (they were still profitable in Q3, unlike ATI).

Yeah other than the initial lower price (which don't get me wrong was great). I'm not sure what else is special about the RV770. Granted it was a much better offering than what they had out before, but it did not break any new ground or speed records.

Either way I'm glad to see AMD competitive. Hopefully the Phenom II will do the same. The prices of i7 are starting to get up there.

I don't want any monopolies.

You did look at the respective die sizes of competing parts didn't you?

The reason the 4870 are so popular is the same reason the 8800GT was so popular. It didn't break new ground and wasn't the fastest thing you could buy, but the performance you get for the money is incredible. The 8800GT gave you very near 8800GTX performance in many cases for a lot less money. The 4870 gave you GTX260 performance (and then some) for under $300 while Nvidia wanted over $400 for their part. Wreckage, you can't see why that would make for a very popular part with a lot of positive buzz around it?


Its not just about the cost.

What makes the RV770 special is it overturned the thinking that die sizes had to keep increasing in size to compete.

This gives ATI, IMHO, an advantage architecturally for the future. If they go down the small die size but multiple dies they get a much cheaper, more flexible product than going with the biggest die they can each generation.


So its not just what fan boys (of ether side) want thats important, the chip designers are competing with the laws of physics as well as with each other, and you cant use PR to beat thermal laws.
 

Creig

Diamond Member
Oct 9, 1999
5,171
13
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Originally posted by: WelshBloke
So its not just what fan boys (of ether side) want thats important, the chip designers are competing with the laws of physics as well as with each other, and you cant use PR to beat thermal laws.

Well.... Graphics cards and PR are sort of related to each other since both their waste products are hot air.
 

Cookie Monster

Diamond Member
May 7, 2005
5,161
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You know this reminds me of nVIDIA who openly spoke about NV30 and its road to failure (with the launch of the NV40).

Link

However its a fact that ATi has always failed to deliver on the $200 front for sometime. They have always been lackluster in performance with the initial parts and had very late replies. (6600GT, 7600GT, 9600GT, 8800GT etc etc). Im just surprised that it took them years to finally release a bang per buck card in awhile.

edit - Its strange how market perceptiveness has changed from the days of G71/R580. G71 was strikingly similar to the R580. nVIDIA chose to pursue a similar goal like ATi did with RV770. Instead of 32 pipeline monolithic monster, they went for a smaller die, lower transistor part while maintaining higher performance through higher clocks and faster GDDR3 modules available at the time. Yet the halo effect from the X1900XTX still had many consumers thinking that ATi was the dominant leader at the time. Same goes for G92.

Actually looking back at nVIDIA's development cycle they have brought both the bigger die and performance "RV770" approach. I think AT focused too much on the former and forgot about the latter.

NV45 -> NV42 (Remember the 6800GS outperforming the 6800ultra variants?).
G70 -> G71 (7900GT/GS etc bringing 7800GTX performance for the cheap)
G80 -> G92/G92b (8800GT performing on a similar level to the 8800GTX)
 

Kuzi

Senior member
Sep 16, 2007
572
0
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That had to be one of the best articles I read at AT in a long time, gj to everyone that was involved :)

Makes me more excited about next year, what the RV8xx will be like, and what NVidia will have in store for us.
 

Keysplayr

Elite Member
Jan 16, 2003
21,209
50
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That was a very good article. Interesting read. It just shows the incredible amount of work and dedication, sweat and tears go into the creation of semis. CPUs, GPUs, chipsets, you name it. I think a lot of us take this for granted much too often. My hat is off to all these hard working people. If I could go back and do it all over again, I think would have liked being a part of this type of field. Science and Math were always my best subjects. AP classes throughout HS. Should have stuck with it I suppose, but who knew then what road to take to lead to something in these fields. At least I didn't. LOL.

I think we give both sides a hard time without really thinking about what goes into these products.

 

deerhunter716

Member
Jul 17, 2007
163
0
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Originally posted by: chizow
Also no mention of ATI's very public driver problems. Considering both Anand and Derek have spent considerable space covering monthly driver issues, I'm a bit surprised he didn't directly confront them to affect change.

HMMM, drivers always work like a charm for me and NEVER any issues like I used to have with NVidia. They both have their issues depending on people's setups, lol
 

chizow

Diamond Member
Jun 26, 2001
9,537
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Originally posted by: Creig
Originally posted by: chizow
Yep, and the 8800GTX proved the market will pay for performance.

You're more than welcome to go pay Nvidia $650 for a GTX280 if you'd like. I'm sure they wouldn't mind the extra revenue. The rest of us will be happy with the lower prices all around that resulted from the release of the 48X0 series.

In fact, since you're so bored, we'd be more than happy if you stopped this thread crapping entirely. You came in here and started going on about ATI drivers and pricing when this thread is about the interview with the AMD engineers responsible for the RV770.
Like I said, I'm sure you're tickled pink over AMD's pricing, that $150 graphics card looks great next to your $65 TLB-error Phenom and free AR AM2 mobo. Its a good time to be an AMD fan.

As for bringing up drivers, how is it thread crapping? You don't think Anand did his readers a huge disservice by not mentioning any of the issues he and Derek have spent considerable word count on over the last few months? He had basically everyone and anyone responsible for the graphics division at AMD in a room and didn't address the only real blemish on an otherwise good part: the drivers.

Originally posted by: deerhunter716
Originally posted by: chizow
Also no mention of ATI's very public driver problems. Considering both Anand and Derek have spent considerable space covering monthly driver issues, I'm a bit surprised he didn't directly confront them to affect change.

HMMM, drivers always work like a charm for me and NEVER any issues like I used to have with NVidia. They both have their issues depending on people's setups, lol
I'm sure they do work like a charm for you! :) But I'm going to guess you:

1) Don't run Vista 64 + CrossFire and
2) Don't care for Far Cry 2

Doesn't mean there aren't some very public driver problems though.

Considering it was an article about the hardware, based on a discussion with the hardware engineers, it's thread crapping. Knock it off.

-ViRGE
 

SlowSpyder

Lifer
Jan 12, 2005
17,305
1,001
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I thought the interview was with guys who designed hardware, not people who write software..? Assuming that is the case I would think they wouldn't talk about the drivers.

I thought 8.10's work well, 8.11's were the problem? 8.12's will be out very soon, I guess we'll see how good or bad they are.