Nvidia stockpiles 55nm parts for a massive assult on ATI

[WelshBloke]

Originally posted by: chizow


[*]You and others said the same about GT200, too big, too expensive, low yields, can't make a profit.

Result: Nvidia drops prices to $500 and $300 still manages to turn a profit in a down economy. Recently drops their GTX 260 prices even lower, closer to a $200 price point

Meaning they were ripping us of at the original price?

 

[chizow]

Originally posted by: WelshBloke
Meaning they were ripping us of at the original price?

That's one way to look at it. Video cards are like cars, they begin depreciating as soon as you drive them off the lot. They probably depreciate even faster in terms of %.

Nvidia knows this, and they price based on what they thought the market would bear with the intention of making a profit knowing in 12-18 months they're going to introduce something to replace it. You don't have to buy when a product is at its highest value, you only have to if you want the latest and greatest.

 

[Creig]

Originally posted by: chizow
Also, you can't seriously think a wafer costs the same regardless of process? New processes are going to cost more per wafer as companies with high capitalization need to offset depreciation with higher revenues on new production lines. Given the amortization of these assets is going to be greatly accelerated due to the nature of the industry, older processes will be significantly cheaper than newer ones.

Yes, but even if both the GT200 and the RV770 are produced on the same process, the GT200 will be more expensive simply due to its increased transistor count (ie - die size). Less dies per wafer means higher cost per GPU. Larger dies also have a correspondingly higher chance of failure per core due to manufacturing defects which results in a lower overall yield. A lower yield also contributes to a higher cost per die.

rjc explained all this in his post. His figures were computed with both the RV770 and GT200 being constructed on the same 55nm process.

Originally posted by: chizow

• You and others said the same about G80 using the same flawed logic as above, too big, too expensive, low yields, can't make a profit.
  
  Result: Nvidia manages to sell $400 and $300 versions of G80 and posts record profits.
  
• You and others said the same about GT200, too big, too expensive, low yields, can't make a profit.
  
  Result: Nvidia drops prices to $500 and $300 still manages to turn a profit in a down economy. Recently drops their GTX 260 prices even lower, closer to a $200 price point

I never said the GT200 was too big, too expensive, can't make a profit. I did say it had low yields simply because that's what has been posted around the internet. Yes, it is big, yes it is expensive. Those two facts cannot be disputed. Especially not with nearly every GT200 review containing the word "monolithic".

Nvidia was definitely making a hefty profit on the GT200 back before the 48X0 was released. How could they not when they were charging $650 for a single GTX280 and $450 for a GTX260? These days, however, they've had to slash their prices so low that you can find the 280 for $410 ($375 after rebate). That's a $240 decrease in profit per card that Nvidia is no longer receiving. I don't know how much profit Nvidia was expecting to make per card, but that lost $240 would have to represent a majority of it right there.

Originally posted by: chizow
In the meantime, AMD still has not turned a profit since acquiring ATI. These are facts.

AMD may be in the red, but their graphics division (ie -ATI) is in the black.

 

[biostud]

Yes I made the assumption that making a 55nm 956M chip is cheaper than both a 1.4B 55 and 65nm chip. I know that there's more than die size that matters, but assuming that a 1.4B chip cost the same or less than the 956 doesn't seem logical. If someone has some actual numbers for the production cost or better insight to manufacturing cost I'm happy to be enlightened or proved wrong.

 

[chizow]

Originally posted by: Creig
Yes, but even if both the GT200 and the RV770 are produced on the same process, the GT200 will be more expensive simply due to its increased transistor count (ie - die size). Less dies per wafer means higher cost per GPU. Larger dies also have a correspondingly higher chance of failure per core due to manufacturing defects which results in a lower overall yield. A lower yield also contributes to a higher cost per die.

Once again that's not necessarily true, as other factors such as clock speed and TDP come into play in determining yields and defect rate. Anand's article covers this quite a bit with the different strategies but its clear that NV's willingness to sell near-complete GT200 cores at $200-300 price points proves any claims about GT200's cost and yields to be largely exaggerated.

rjc explained all this in his post. His figures were computed with both the RV770 and GT200 being constructed on the same 55nm process.

Wrong, he computed the difference with GT200 on a 65nm process and RV770 on a 55nm process. We don't know the die size at 55nm for GT200b, but it should result in ~20% decrease in size.

I never said the GT200 was too big, too expensive, can't make a profit. I did say it had low yields simply because that's what has been posted around the internet. Yes, it is big, yes it is expensive. Those two facts cannot be disputed. Especially not with nearly every GT200 review containing the word "monolithic".

BS. You've been piping the same garbage for years, yet once again, Nvidia still manages to turn a profit. Wrong much?

Nvidia was definitely making a hefty profit on the GT200 back before the 48X0 was released. How could they not when they were charging $650 for a single GTX280 and $450 for a GTX260? These days, however, they've had to slash their prices so low that you can find the 280 for $410 ($375 after rebate). That's a $240 decrease in profit per card that Nvidia is no longer receiving. I don't know how much profit Nvidia was expecting to make per card, but that lost $240 would have to represent a majority of it right there.

Of course their profit margin is going to be impacted, but that doesn't mean they can't be profitable selling those very same parts. They just have to sell more product to make the same profit because their margins are lower, which is the approach AMD takes.

AMD may be in the red, but their graphics division (ie -ATI) is in the black.

Which means what exactly? By your metric AMD is also profitable. Oh wait, no they're not. Also, if you properly allocate non-operating expenses you'll see ATI still isn't profitable.

 

[nosfe]

lets not forget that nvidia turns a profit mostly because of the quadro line, if you'd take only the numbers from the consumer market i bet it wouldn't be so rosy

 

[Wreckage]

Originally posted by: nosfe
lets not forget that nvidia turns a profit mostly because of the quadro line, if you'd take only the numbers from the consumer market i bet it wouldn't be so rosy

I assume you are ignoring their majority stake in the desktop market and second only to Intel on the Laptop side. Not to mention their large chipset market.

Yep.

 

[WelshBloke]

Originally posted by: Wreckage

Originally posted by: nosfe
lets not forget that nvidia turns a profit mostly because of the quadro line, if you'd take only the numbers from the consumer market i bet it wouldn't be so rosy

I assume you are ignoring their majority stake in the desktop market and second only to Intel on the Laptop side. Not to mention their large chipset market.

Yep.

I've no idea if nosfe is talking out his butt or not but he's talking profit and your talking market share.

 

[Creig]

Originally posted by: chizow
Wrong, he computed the difference with GT200 on a 65nm process and RV770 on a 55nm process. We don't know the die size at 55nm for GT200b, but it should result in ~20% decrease in size.

You're correct, he did compute the GT200 on 65nm. But he also used the high end of GT200 yield guesstimates of 70% when rumors range anywhere from 40%-70%, so it could go either way. If I can find more concrete 65nm vs 55nm wafer costs, I'll post an update.

Originally posted by: chizow
BS. You've been piping the same garbage for years, yet once again, Nvidia still manages to turn a profit. Wrong much?

*sigh* Is there any chance you could leave the personal insults out of it and simply discuss the subject at hand?

Nvidia isn't turning as much of a profit as they would have if AMD hadn't released the 48X0 series. Nvidia is also getting revenue from their chipset sales, from their G92 sales, from their mobile GPU sales, etc. All that plus whatever they get from GT200 is all wrapped up to make their overall quarterly statement. You can't simply say "Nvidia is making a profit therefore the GT200 is making a profit". It doesn't work that way.

Originally posted by: chizow
Of course their profit margin is going to be impacted, but that doesn't mean they can't be profitable selling those very same parts. They just have to sell more product to make the same profit because their margins are lower, which is the approach AMD takes.

I never said otherwise. They certainly can be making a profit on the GT200. But they could also be very close to their cost margin. Cutting $240 of profit per card is a lot no matter how you look at it. Compared to what they were making before the 48X0 was released, they're only making a small fraction of that profit now.

Originally posted by: chizow
Which means what exactly? By your metric AMD is also profitable. Oh wait, no they're not. Also, if you properly allocate non-operating expenses you'll see ATI still isn't profitable.

No, if I had meant to say AMD was profitable, I would have. AMD is NOT profitable at the moment (at least when taking into account a one-time revenue of 191 million from selling equipment to JSC Angstrem), although they are close. Their graphics division (ATI) however, is reporting a net profit for Q3 2008. I'm pretty certain this AMD financial turnaround did NOT come from selling CPUs.

The company (AMD) filed a net loss of $67 million on a revenue of $1.56 billion.
This represents 32% higher score than previous quarter, and 14% jump from Q3'07. What made the cut for the company was tremendous growth in graphics, driven by great success of ATI Radeon 4800 series.

AMD reports $1.78B revenue, records first profit in years (non-GAAP)

 

[nosfe]

actually i'm talking about both, on the workstation side margins are higher and nvidia has about 70% marketshare(fud stated recently that nvidia has 80% of that market). While on the desktop side nvidia does still have more marketshare than ati but it has decreased in the last quarter which means that ati sold more cards that quarter than nvidia

honestly i don't know why you're fighting it, 4870 sells for more than the gtx 260 in the US while its die size is smaller, ati only recently decided to slash prices so they were selling well at those prices. Now yes, i don't know exact figures and i'm mostly guessing but i'd say when taking only the consumer graphics card market for the last quarter, ati made more money than nvidia which is a good thing, more competition, lower prices

 

[BladeVenom]

For those who still think Nvidia is making a profit.

"Nvidia's revenue fell to $898 million in the third quarter, from $1.2 billion in the first fiscal quarter, and the company announced a $120 million loss in the third quarter."
-- http://www.usatoday.com/money/...26-graphics-card_N.htm