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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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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.

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