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Storm clouds are gathering as NVIDIA faces a reinvigorated competitor

As the old saying goes, when it rains it pours.  NVIDIA was performing beautifully thanks to aggressive pricing and performance of its 8000 series of graphics cards.  It looked poised to leave competitor AMD (formerly ATI) in the dust.  However, the latest round in graphics war has marked a dramatic turnaround with AMD's 4850 and 4870 outperforming NVIDIA's offerings at a lower price

While NVIDIA still holds a tenuous grip on the highest end offerings, with its GeForce GTX 280 GPU, this might soon slip, depending on the performance of AMD's dual processor 4870 X2 (R700) card, likely coming in Q3 2008.  Meanwhile, NVIDIA faces challenges from Intel in its low-end and laptop graphics offerings, and from AMD's PUMA chipset/graphics package in the laptop market.

The economic repercussions of NVIDIA's slippage are already visible.  NVIDIA announced yesterday that it was going to turn in revenue of $875 million to $950 million for Q2 2008, which ends July 27.  This is significantly lower than the current analyst expectations of $1.1 billion.

That was not the end of the bad news from NVIDIA either.  It announced that it was facing a massive recall, due to overheating GPUs in notebook computers.  NVIDIA reported higher than average failures in both the laptop GPUs and in laptop chipsets.

NVIDIA said that the chips and their packaging were made with materials that proved to be too "weak".  NVIDIA passes the blame to notebook manufacturers, which it says contributes to the problem.  Typically notebooks have poorer ventilation and components concentrated in a smaller space than desktop computers.

The result of the recalls is that NVIDIA will be taking a onetime charge of $150M USD to $200M USD to cover the damages.  It plans to use the money to repair or replace defective parts.  It also hopes to collect part of the money from insurers it uses.  However, it has acknowledged its problems and switched the materials it uses.

The news has resulted in NVIDIA taking a beating on the stock market, sliding over 25 percent.

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By MrBlastman on 7/3/2008 11:15:20 AM , Rating: 0
This hurts. I'm feeling the pain right now. :(

I'm not worried though, I am sure Nvidia will bounce back over time. They are a well-organized company that produces solid results.

Perhaps this is a signal that our current PC builders are tired of more expensive product? I don't think we can all complain though - given that the prices of video cards have fallen dramatically. You can get great performance for around 200 bucks which ain't bad at all.

RE: Ow
By JasonMick on 7/3/2008 11:22:52 AM , Rating: 5
I think more importantly, it's a validation of AMD's assertion that monolithic GPUs just aren't what the market needs. One key reason why the 4850 and 4870 are so competitive is that they use smaller GPUs, more akin to Intel's multicore strategy.

Meanwhile Nvidia has build this huge GPU for the 200 series, that is incredibly power and incredible from a design standpoint, but cost much more to make, much more to produce, and is out of the price range of most customers. Inherently huge GPUs mean huge dies, which means lower yields, which finally means higher prices. This is just not a successful strategy.

It should be interesting whether Nvidia keeps with the "design big" mentality, or whether reality sets in for the next round.

RE: Ow
By DEVGRU on 7/3/2008 11:46:21 AM , Rating: 2
...Lest we forget usually much higher power consumption, and higher temperatures...

RE: Ow
By Goty on 7/3/2008 11:49:57 AM , Rating: 2
Well, the actual power consumption isn't a whole lot more than the RV770 GPUs, and the temperatures are actaully not too bad, either.

RE: Ow
By nosfe on 7/3/2008 12:44:49 PM , Rating: 2
well, they did say that based on polls noise was a bigger concern to their users then temperature and to be frank, that's also how i feel about it, i prefer it to be a little hotter then to have a hairdryer in my case, also there are unofficial fixes for the temperature problem(make the fan spin at ~40% and lose ~20C at idle without much noise added, or so i've read in the forums)

RE: Ow
By thestain on 7/3/2008 2:33:59 PM , Rating: 2
How about more details?

From quick reading of various news stories, no mention is made of which gpu's on which motherboards are or have had these problems and which laptop makers. Did Dell or some other big lap top maker screw up?

Which motherboards are having these problems? No mention of any particulars... please tell us more!!

RE: Ow
By flipmode on 7/3/08, Rating: -1
RE: Ow
By JasonMick on 7/3/2008 12:11:36 PM , Rating: 5
No, read Anandtech's exemplary breakdown on the topic.

Yes, RV770 is biggish when compared to Intel processors, but it is smaller that the GT200 dies. Yes, its @ 55 nm and the GT200 is @ 65nm, but still the normalized die for the GT200 is substantially bigger.

And even if you toss out the die there's other key decisions which AMD wisely made, such as the decision to move to 55nm, the adoption of GDDR5, etc.

And to state my bias I really prefer neither AMD nor Nvidia, rather whichever has the best offering. My laptop currently has an Nvidia 8400 GT in it (hopefully it won't die!! -_- ) and I don't own any AMD products.

That said I still think AMD has made a number of key good decisions that have given them a superior position in the current round of graphics cards, and you'd be hard pressed to debate that without showing a strong bias.

RE: Ow
By flipmode on 7/3/08, Rating: -1
RE: Ow
By JasonMick on 7/3/2008 1:15:30 PM , Rating: 4
5. characterized by massiveness, total uniformity, rigidity, invulnerability, etc.

I guess you could call the RV770 in the sense its one piece, but its more frequently used to mean "big" these days. Using definition 5, the GT200 is more monolithic than the RV770.

Vocabulary is often like that... like how "pert" could mean healthy, but more frequently its used to describe an impertinent (rude/saucy) person. ;)

RE: Ow
By flipmode on 7/3/08, Rating: -1
RE: Ow
By Mitch101 on 7/3/2008 2:16:55 PM , Rating: 2
Jefe would you say I have a monolith of a gpu?

RE: Ow
By Bruneauinfo on 7/3/2008 3:12:51 PM , Rating: 2

and while we're at it lets get caught up in some semantics.

apparently, ATI is lucky they use good materials.

and nVidia probably won't be buying AMD anytime soon.

RE: Ow
By mathew7 on 7/4/2008 1:51:44 AM , Rating: 2
In your quote the missing part is "high/top performance". So for high/top-performance cards the single-chip solution is over. Basically what they are saying is that they produce a mainstream chip and combine more of them for high-performance. But we all know how SLI/Crossfire does not double performance. The overhead of more chip management kills it (at least in present time titles).

RE: Ow
By afkrotch on 7/7/2008 5:32:01 AM , Rating: 2
Let's not forget the need for driver updates that provide profile setup for games. This is where I find the biggest flaw in multiple-gpu setups.

If you're game doesn't get a profile, you won't get the most performance out of the cards. AMD recently put in the profiles for Bioshock and The Witcher. Well I stopped playing Bioshock about 2-3 weeks after it released and I won't touch The Witcher with a 10 foot pole.

This is the whole reason I haven't bothered with a multiple GPU setup. Both strategies from AMD and Nvidia have their merits. I'm just with Nvidia on this one. I prefer having a single GPU.

Less hassle for me to watercool, less cables, no wasted slot, no need for some 8000w PSU, and so on.

RE: Ow
By TomZ on 7/3/2008 2:05:13 PM , Rating: 3
5. characterized by massiveness, total uniformity, rigidity, invulnerability, etc.

A "tech" site should stick with the "tech" definition, which is the one the OP references. Technicians and engineers in the field don't just mean massive, etc. when they say "monolithic." Your use is more of a layperson.

RE: Ow
By MamiyaOtaru on 7/4/2008 1:08:11 PM , Rating: 2
I'd say pert is more often used to describe jubblies

RE: Ow
By TheJian on 7/3/08, Rating: -1
RE: Ow
By flipmode on 7/3/2008 1:55:23 PM , Rating: 2
Whom are you responding to?

RE: Ow
By JasonMick on 7/3/2008 2:53:53 PM , Rating: 4
Someone had a busy day at the nvidia koolaid stand I think...

RE: Ow
By TheJian on 7/7/2008 2:57:09 PM , Rating: 1
My reply was to you (sorry flipmode). No koolaid involved. Nvidia already dropped their GTX280 to $459 at newegg (couple cards after rebate, and quite a few under $500). The GTX260 is now $329 at newegg. So what I said has already happened. They'll drop pricing to make AMD's cards worth less. They just did. You can expect more cuts the second 4870x2 comes out. By then 260/280 will have a die shrink just about out the door to easily allow this and add performance. I'm not saying I LIKE nvidia, I'm saying this is what's going to happen. Currently I'd buy a 4850/4870/GTX260 (toss up 4870/GTX260). But I'd also say ATI won't look quite so good after another cut from Nvidia. $460 isn't bad for king of the hill. That's $140 less than quoted in all these reviews of it. Quite a price cut in ONE month eh? The GTX280 doesn't look so bad now. Remember that we used to have $499/$599 cards to get top of hill performance. Right now that's only $460. That's a great buy all of the sudden. My point is, AMD has a great pair of cards, but their performance/buck was only great when GTX260 was $450 and GTX280 was $600. At $329 and $460 things change. The reviews should be updated showing this since it happened so fast.

RE: Ow
By carl0ski on 7/4/2008 12:25:00 AM , Rating: 2
Why don't people know the definition of monolithic? From consisting of one piece; solid or unbroken RV770 is monolithic - it's one piece of silicon. That's all I'm saying.

AMD Barcelona Quad Core and Intel Core 2 duo are monolithic
IBM Cell is monolithic.

however they are modular monolithic
they have the potential to disable part without rendering the entire device inoperable.
prior to being built they may also leave sections out of the construction phase.
ie Cell processors with 3 6 or 9 cores are available.
A SIMD core is very similar to NVIDIA's SM with a couple of exceptions:

1) There are more SPs in AMD's SIMD Core (16 vs 8)

In theory AMD can completely remove 4, 8 or 12 of those SIMD (SP) cores to make the device smaller, consume less power and far cheaper.

or better dynamically disable unused ones to conserve power.

RE: Ow
By Clauzii on 7/9/2008 9:55:52 PM , Rating: 2
Reg. CBE, the PS3 has 7 working cell-units, of which 6 is under user control, so there are 8 cores too :) And (You probably know) one core is NOT a CBE but a PPC acting more like the master control.

RE: Ow
By psychobriggsy on 7/3/2008 12:20:08 PM , Rating: 2
Yeah, but ATI will have their X2 cards out soon (August at the latest) which will put two *cheap* GPUs on a card to outperform the vast, huge, GTX280.

It is interesting that the RV770 is pad bound, i.e., they can't make it any smaller unless they cut the I/Os. It is actually still a large die, but half the area of the GT200, which means it is significantly less that half the price to make (due to the economics of fabbing) and I'm sure that AMD are storing the slightly defective (some dead shader cores) dies up to launch a 4650 or similar product soon as well, for $149 or less.

RE: Ow
By flipmode on 7/3/2008 1:39:02 PM , Rating: 1
Yep, but why are people already using the monolithic term for RV770 when it's R700 that's monolithic?

RE: Ow
By misuspita on 7/3/2008 3:10:00 PM , Rating: 2
I find it a little hillarious that AMD chose the path to beat Nvidia that got them beat up in the CPU market by Intel.

RE: Ow
By carl0ski on 7/4/2008 12:37:51 AM , Rating: 2
what the slower but performance in high numbers category?

4 socket and 8 socket quad core opteron's still perform and sell very well.

it is like a large number of small predators using sheer numbers to overpower very large prey.

ATI is probably banking on placing 2 small 4870 chips using the same real estate on a discreet card as 1 enormous x280.
as that number doubles
NVIDIA fits 2 x280 on one board ATI can aim for 4 small 4870.
Scaling far higher.

RE: Ow
By MonkeyPaw on 7/3/2008 3:33:51 PM , Rating: 2
Well, it appears that RV770 still has room to scale, and soon:

Diamond “Unlocked” Radeon HD 4870 XOC Black Edition graphics card comes with graphics processing unit clocked at 800MHz and 512MB of GDDR5 memory operating at 4400MHz, up from 750MHz/3600MHz on reference design ATI Radeon HD 4870 graphics adapter. Moreover, according to Diamond Multimedia, the firmware of the board was modified and the board can be overclocked even further and can leave behind the current flagship Nvidia, the GeForce GTX 280.

“The firmware was custom designed to enable end users to go beyond the normal over clocked speeds and allow them to push their cards for higher performance via the Catalyst Control Center. The GPU’s custom firmware has been unlocked to push cards to GPU settings of up to 950MHz and Memory of up 1200MHz,” said Mr. Gastelum.

That could mean there will be a 4890 with even higher clocks. The 4870X2 may not even be needed to topple the GT200 if the RV770 can scale that much higher.

As for the "Monolithic" comment--it's a little misused in this case. That term applies to Phenom X4 vs Core2 quad. Intel uses 2 dies in MCM, while AMD has one "monolithic" die. The term doesn't work for GPUs until someone comes up with a similar MCM approach. Even X2s and GX2s don't count, since those are more like having 2 cards stuck together, not 2 GPUs on one BGA socket.

RE: Ow
By bill3 on 7/7/2008 8:22:47 AM , Rating: 2
I dont think it was building a monolithic GPU that was so much the problem it was that Nvidia built a monolithic GPU that isn't fast enough for its huge size. It's over twice as big and costly as RV770, but it's not nearly twice as fast. I think if it WAS twice as fast, there would be no real problem here for Nvidia. So blame Nvidia engineering inefficiency, not the size of the chip.

In fact really the main problem with GT200 series can be boiled down to an even simpler one, clockspeed. The GT260 often performs not much better than a 9800GTX. And theres a reason, because it isn't! Both have the same number of TMU's, but 9800GTX's 128 shaders are clocked so much higher,
than GT260's 192, that 9800GTX is not far behind in raw shader power. Adjusted for clock, 9800's 128 shaders at 1690 mhz are equivalent to 166 shaders at GT260's 1296 mhz shader clock. 9800GTX+ gets even closer, being equivalent to 181 shaders. Not only that but GTX has a significant core clock advantage as well. Of course, 260 has more rops, more VRAM, and more bandwidth, but whenever those are not a major factor which is often, you see it isn't much better than 9800GTX.

I think unless ATI has an answer for the upcoming 55nm GT200 revision which will probably be clocked a lot higher though, GT200 series could still end up a winner. Time will tell.

I mean, realistically the 956 million transistors in RV770 make it pretty "monolithic" itself. Just less "monolithic" than the other guy.

In fact I've heard one brave soul argue that in fact AMD's no-monolithic strategy was a grave mistake, in that they probably could have easily taken the single-gpu performance crown outright with this architecture had they been willing to make the chip just a little bigger (say, 30% larger, 60 TMUs and 1200 sp's or something like that). That's an interesting idea, at least.

RE: Ow
By abzillah on 7/3/2008 12:46:59 PM , Rating: 1
I don't see how this is a that bad. Nvidia made $875 million last quarter and is making $950 million this quarter, which is more than before, but less than the analyst predicted. A few people may sell their shares of Nvidia stock, but this is not going to have a negative effect on the company. Can you guys really tell me that this is something bad for the company?!

RE: Ow
By TomZ on 7/3/2008 2:00:50 PM , Rating: 2
It's more a question of expectations. Obviously many investors expected higher revenue, and that expectation was priced into the (higher) stock price. Now that the revenue is lower, the stock is perceived to be less valuable, and so the price goes down. All seems normal to me.

In other words, it's not really a question of "good" or "bad," but more a question of relative value.

RE: Ow
By deadrats on 7/6/2008 1:27:00 PM , Rating: 2
I'm not worried though, I am sure Nvidia will bounce back over time. They are a well-organized company that produces solid results.

i'm sure many people said the same thing about 3DFX before they went under.

i'll make a bold prediction right now: not only will nvidia be out of business in 3 years, but discrete graphics add in cards as we know them will also be a thing of the past.


because the industry is moving towards hybrid cpu/gpu chips, that's why. microsoft has already announced that new versions of the xbox 360 will use a hybrid cpu/gpu to lower costs and reduce heat output, amd is moving foward with it's plans for an integrated gpu on it's next-next generation of cpu's, intel is obviously moving in that direction, it's discrete graphics card will feature x86 cores and it has already announced that some high end versions of nehelam will have integrated graphic chips (and in another generation of cpu's it will also use dram instead of sram for it's caches).

i personally don't see discrete graphics cards being in any demand once we have 12, 16 or more core cpu's with integrated graphics chips, i just can't see a discrete graphics solution being faster.

"This is from the It's a science website." -- Rush Limbaugh

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