HWZ : Looking at PCI Express, some manufacturers we spoke to were quite skeptical of its performance benefits as compared to AGP. How confident is ATI in delivering the kind of performance envelope that power users require?
Dave: The foundations we have to remember about PCI Express is that AGP is really pretty much tapped out. In order to get to the next level of performance, we really have to double the bus width. So what PCI Express did was came in and cut the AGP bus width in half because ultimately what drives power is pin-out and cost is driven by pin-out. So what we've been able to do is reduce the bus width and as you can see, it almost doubles the performance from a bandwidth standpoint. So in terms of immediate performance gains, I don't think that was the primary objective of PCI Express. The primary objective was to create a foundation for the next generation of visual platforms. And you have be able to go in and in fact, re-architect at the platform level, recognize that you're not going to see instantaneous performance advantages when you go in and affect double infrastructure. It's like the network infrastructure, you might run it ten times faster, not today, but it gives you the headroom and growth opportunity. So I think PCI Express is really there to create a new foundation for us to grow from because AGP was tapping out. Now we have specific applications where you can go in and see performance advantages. The generic applications today, if they are not pushing AGP to the limits, they are not going to push PCI Express to the limits either. It's really the next generation of development that's going to do that.
HWZ: In your opinion, how quickly do you think the market will switch over to PCIe? The switch from PCI to AGP was a pretty smooth transition, do you think we'll see the same with AGP 8x and PCIe?
Dave: What drives the switching of the industry is (to look at) what's being provided by the OEMs and I think Intel is providing Grantsdale as the chipset of choice, [and] moving forward to provide next generation processors and next generation speeds of front side buses. ATI, and you'll see over time with NVIDIA, our next generation of graphics solutions [running] natively on PCI Express. And so if the industry wants to move forward technologically, it's going to have to move forward with PCI Express. I think the whole PC industry thrives on this idea of better, faster and cheaper. PCI Express is going to prove to be a better interface over time. The OEMs are going to switch very fast. I think the channel market will take a little longer to switch. We think of it as a 12 month transition but it's going to go fairly quickly in the OEMs and I think you'll see the high-end performance segments go fairly fast in the channels as well.
HWZ: So, if you have both AGP and PCIe VPUs, isn't it very difficult to control the number of SKUs you carry, and isn't it a risky business to build so many different chips as well?
Dave: Gee, would you rather have one SKU and no business, or five SKUs and lots of business? That's an easy answer for me. (laughs) So ultimately you've got to solve the customer's problems and so for us, in the low-end, it's all about cost and capability. In the high-end, it's about performance. And our view is that having a single SKU and a stack of AGP parts doesn't solve either of those problems on this side of the fence. So it's just not the right long term solution. We actually taped out our first native PCI Express solution twelve months ago. That was the demonstration vehicle which ultimately now is the X600. The first generation of that was not even a low-k process but it was validating both the Intel Grantsdale solution and our design. We went through a couple of iterations of that, not just ATI, but ATI and Intel went through iterations of both chips to be able to optimize that. So when we finally entered calendar year 2004, we knew we had a solid interface and now we deployed that in 0.11µm and into our high-end X800 solution. It was a solid base interface we're working with. So, you always have to take some risk in this industry if you want to innovate and we decided to innovate.
Stanley: Risk is an inherent part of this business and we accept a lot of risk and we execute them well in order to minimize the impact of risk. The reason why there's only two major graphics players, excluding Intel, is that it's not easy to support all the OEM customers and all the risks and all the developments associated with the software and hardware. It's a challenging business to be in and we managed to do it very well. So, risk is something that Dave is good at dealing. (laughs)
Dave: That's why I don't have any hair back here. (laughs)