Why dont Intel,IBM or AMD start making GPUS?

mrgoblin

Golden Member
Jul 28, 2003
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I was wondering why Intel, AMD or IBM don't try to make gpu's. I mean they have much more money than Nvidia or ATI and i'm sure they have much more resources so why haven't they even attempted to enter the graphics field? Intel extreme graphics dont count. I would imagine they would own the market with their kind of resources, marketing and brand recognition. In a perfect world, Nvidia would make the mobo's, AMD would make the processors and Intel would make the gpus. Now everyones happy :D
 

Nebor

Lifer
Jun 24, 2003
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Plus intel has pretty much mastered the .13 micron process. And soon the .09 micron process....

I dunno... Maybe intel should buy nvidia.
 

draggoon01

Senior member
May 9, 2001
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also you always read about how gpu's are becoming more like cpu's every day. why can't intel use their know-how and apply it to make a competitive gpu? and since money is being spent more for gpu's than cpu's for gamers who want better performance, it would make sense that intel/amd follow the money...
 

mrgoblin

Golden Member
Jul 28, 2003
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As far as im concerned, we should have 1 gig core/1.6 gig memory on the .09 process if intel made chips and they could do that in like a year. Why give up billions when you can rule?
 

MDE

Lifer
Jul 17, 2003
13,199
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AMD is bleeding cash right now, so they can't really start anything right now. IBM is in bed with Nvidia and AMD (talk about an ugly threesome :)). Personally the day I buy and Intel graphics "accelerator' is the day I trade my Athlon for a 486 on a 14.4 dialup connection.
 

mrgoblin

Golden Member
Jul 28, 2003
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U mean my current rig? How dare you diss samantha! (slowly carresses my 14.4 modem, the bad man wont talk about you anymore)
 

MDE

Lifer
Jul 17, 2003
13,199
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Did you pay $350 for that modem back in the day? I don't even remember using a 14.4 modem. Our first was a 33.6 USR Sportster that was slipped into a 28.8 box. (I'm 18 if that gives you any perspective)
 

ethebubbeth

Golden Member
May 2, 2003
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does anyone here remember the suckage that was the intel i740 graphics chipset? i still can't believe i had one of those back in 1998...
 

orion7144

Diamond Member
Oct 8, 2002
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Intel already has numerous graphic chips out there but they are mainly built on the MB's with video. They aren't too bad for the kids.

I don't think Intel would get into the higher end GPU's because they would porbably do pretty good at it and they don't need the Fed's after them again saying they are a monopoly like MS.
 

FullRoast

Senior member
Oct 11, 1999
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Actually, as someone mentioned, Intel tried their hand at higher end video several years ago and were not successful. The i740 was not as good as the competition when it came out and Intel could not get the next generation out before their competition. I think the embedded graphics they have now in their chipsets was based on that work. Good enough for 2D and low end 3D, not high end.

The reason that nVidia and ATI dominate high end PC graphics is that they leverage one design to get to the next. It is a hard business to break into and succeed. Even nVidia and ATI misstep sometimes and one overtakes the other.
 

dullard

Elite Member
May 21, 2001
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Originally posted by: mrgoblin
I was wondering why Intel, AMD or IBM don't try to make gpu's. I mean they have much more money than Nvidia or ATI and i'm sure they have much more resources so why haven't they even attempted to enter the graphics field? Intel extreme graphics dont count. I would imagine they would own the market with their kind of resources, marketing and brand recognition. In a perfect world, Nvidia would make the mobo's, AMD would make the processors and Intel would make the gpus. Now everyones happy :D

There isn't any money to be made in the GPU market. In the last 4 quarters added up, ATI earned $11.5 million and NVidia made $46.2 million. Total revenues for each were ~$1-$1.5 billion during that year (I didn't take the time to add those up). That means they earn on average 1%-3% profit on each sale. But that was with just two competitors. Add a third competitor and the profit will dwindle even further. Now compare that to Intel. Last quarter Intel had nearly a $900 million profit! Intel could blink and not notice the miniscule amount of money ATI/Nvidia earn in a quarter.

Yes IBM and AMD aren't making much money (if at all) these days. So to them even a $11.5 million yearly profit would be helpful. But how much does it cost to start up a new GPU line? If I had to guess I'd guess about $500 million on the low end - it could be far higher (does anyone have a better estimate since I'm just guessing here). So with $11.5 million yearly profit it would take 43 years to recoup the start up cost! No one in their right mind would ever invest in something that took 43 years to recoup your start up cost (of course this doesn't count the 43 years of interest you had to pay...)

Much more realistically, Intel/IBM/AMD could try to buy ATI or NVidia. However AMD doesn't have the cash to do so. Intel would risk running into monopoly problems and possibly so would IBM.
 

modestninja

Senior member
Jul 17, 2003
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Yes IBM and AMD aren't making much money (if at all) these days. So to them even a $11.5 million yearly profit would be helpful. But how much does it cost to start up a new GPU line? If I had to guess I'd guess about $500 million on the low end - it could be far higher (does anyone have a better estimate since I'm just guessing here). So with $11.5 million yearly profit it would take 43 years to recoup the start up cost! No one in their right mind would ever invest in something that took 43 years to recoup your start up cost (of course this doesn't count the 43 years of interest you had to pay...)

Much more realistically, Intel/IBM/AMD could try to buy ATI or NVidia. However AMD doesn't have the cash to do so. Intel would risk running into monopoly problems and possibly so would IBM.

The last earnings from IBM that I saw (Q1, 2003) were $1.4 Billion on $20.1 Billion in sales... to me that's making a pretty decent amount of money, I definetely wouldn't group them with AMD in terms of earnings.

GPUs have way more transistors than a CPU and have much more speciallized instructions. For example, the r9800 GPU has ~120million transitors and a 3000+ CPU has 54.3 million. That's more than double the transistors. Both intel and AMD would have a lot of trouble breaking into the GPU business because they've have to put in tons of R&D for very little monetary return.
 

beatle

Diamond Member
Apr 2, 2001
5,661
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Originally posted by: dullard
Originally posted by: mrgoblin
I was wondering why Intel, AMD or IBM don't try to make gpu's. I mean they have much more money than Nvidia or ATI and i'm sure they have much more resources so why haven't they even attempted to enter the graphics field? Intel extreme graphics dont count. I would imagine they would own the market with their kind of resources, marketing and brand recognition. In a perfect world, Nvidia would make the mobo's, AMD would make the processors and Intel would make the gpus. Now everyones happy :D

There isn't any money to be made in the GPU market. In the last 4 quarters added up, ATI earned $11.5 million and NVidia made $46.2 million. Total revenues for each were ~$1-$1.5 billion during that year (I didn't take the time to add those up). That means they earn on average 1%-3% profit on each sale. But that was with just two competitors. Add a third competitor and the profit will dwindle even further. Now compare that to Intel. Last quarter Intel had nearly a $900 million profit! Intel could blink and not notice the miniscule amount of money ATI/Nvidia earn in a quarter.

Yes IBM and AMD aren't making much money (if at all) these days. So to them even a $11.5 million yearly profit would be helpful. But how much does it cost to start up a new GPU line? If I had to guess I'd guess about $500 million on the low end - it could be far higher (does anyone have a better estimate since I'm just guessing here). So with $11.5 million yearly profit it would take 43 years to recoup the start up cost! No one in their right mind would ever invest in something that took 43 years to recoup your start up cost (of course this doesn't count the 43 years of interest you had to pay...)

Much more realistically, Intel/IBM/AMD could try to buy ATI or NVidia. However AMD doesn't have the cash to do so. Intel would risk running into monopoly problems and possibly so would IBM.

To add to what you said, nVidia also sells several successful motherboard chipsets, so not all of their revenue is video card related. I wonder what the breakdown is when you take that away.
 

dullard

Elite Member
May 21, 2001
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Originally posted by: beatleTo add to what you said, nVidia also sells several successful motherboard chipsets, so not all of their revenue is video card related. I wonder what the breakdown is when you take that away.

The last earnings from IBM that I saw (Q1, 2003) were $1.4 Billion on $20.1 Billion in sales... to me that's making a pretty decent amount of money, I definetely wouldn't group them with AMD in terms of earnings.

Yes I'm being overly simplistic. But still the CPU makers are working in the billion range while GPU makers are working in the million range. There is profit there, but just not very much compared to what the CPU makers are accustomed to. With AMD, Intel, and IBM all doing much worse than what they had been doing a couple years ago (is this a better way of stating it beatle?), doing a massive amount of R&D now to get into the much smaller GPU market doesn't seem like a good idea to me.

 

mrgoblin

Golden Member
Jul 28, 2003
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interesting, yet i still havent seen any reason why they cant even slightly vemture into the segment given their resources. I would imagine its a gimme.
 

Goose77

Senior member
Aug 25, 2000
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here is one good reason, They would not be able to put out enough chips, hell, AMD and Intel WERE having troubles pumping out processor let alone to add GPU's to that!! i dont think that they have enough gear to pump out chips in volume!
 

randumb

Platinum Member
Mar 27, 2003
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Originally posted by: mrgoblin
I was wondering why Intel, AMD or IBM don't try to make gpu's. I mean they have much more money than Nvidia or ATI and i'm sure they have much more resources so why haven't they even attempted to enter the graphics field? Intel extreme graphics dont count. I would imagine they would own the market with their kind of resources, marketing and brand recognition. In a perfect world, Nvidia would make the mobo's, AMD would make the processors and Intel would make the gpus. Now everyones happy :D

And then AMD, nVidia, and Intel would each have monopolies and charge much more money. Competition is GOOD.
 

Louie1961a

Member
Sep 19, 2001
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Actually, IBM does make GPU's. We are producing the GeForce FX GPU line under contract for Nvidia. Starting in April of 2003, Nvidia began splitting the production of its GPU's between IBM and TMSC. Nvidia actually does not manufacture any of their own GPU's. They simply design them and outsource the manufacturing to other companies. Check out the CNET article below.

CNET news article

So, as far as IBM goes, the answer is we do. I guess the marketing guys don't feel the need to create an IBM branded GPU, and I am sure we are making a bunch of money from Nvidia, so why mess with that?
 

mbackof

Senior member
Sep 10, 2003
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I think IBM sees more profitability in the services side of IT instead of hardware manufacture. As the price of hardware decreases the profit per unit is decreasing. You have to make profit up on volume and aftermarket service contracts. However as long as there are two big players in the CPU and GPU markets things will be OK. If we get stuck with 1 big player, like the OS markets, then things get a bit worse. Competition is good. Blaster worms and RPC vunerabilities are not.

Mike
 

LordOfAll

Senior member
Nov 24, 1999
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Patents is prob the reason why. Nvidia and ATI been at this a while, and b4 that 3dfx (which nvidia bought for thier patents), add in via and sis and their isn't much gpu IP laying around to be snatched up.
 

mrgoblin

Golden Member
Jul 28, 2003
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Imho, in the next 10 years, there will be several processor/gpu makers and we will have a situation like the mobo or memory market.
 

Sunner

Elite Member
Oct 9, 1999
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Originally posted by: mbackof
I think IBM sees more profitability in the services side of IT instead of hardware manufacture. As the price of hardware decreases the profit per unit is decreasing. You have to make profit up on volume and aftermarket service contracts. However as long as there are two big players in the CPU and GPU markets things will be OK. If we get stuck with 1 big player, like the OS markets, then things get a bit worse. Competition is good. Blaster worms and RPC vunerabilities are not.

Mike

Yep, IBM's foundry business has seen very rough times lately, their services business is making serious money though, as it has for some time, and their server divisions are picking up pace rapidly.