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
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.