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Declining to follow the price cut plan

DailyTech revealed last week ATI's new pricing strategy to compete with NVIDIA's GTS 250 rebrand, also known as the 9800 GTX+.

The ATI Radeon HD 4850 512MB was to drop to $129, while the Radeon HD 4870 512MB was scheduled to be cut to $149. This was supposed to be accomplished primarily through the use of mail-in rebates, which ATI would help offset.

Most of the board partners took up the offer on the 4850. However, due to several factors converging at once, the 4850 can now be picked up for around $120 at several e-tailers, albeit with the mail-in rebate.

The story with the 4870 is something else entirely. The Radeon HD 4870 512MB was supposed to drop to $149 with a mail-in rebate, but some of ATI's graphics card partners are resisting this as they feel that since the card outperforms the GTX 260, it should compete against that card. They instead are positioning the 1GB version of the 4850 against the 1GB version of the GTS 250 at the $149 price point.

One of our sources in Taiwan told us: "The ATI lineup is very strong, and we feel the 4850 should go against the GTS 250 and the 4870 against the GTX 260".

ATI has been very aggressive with its pricing, with lower prices and higher performance in the same segments as its nemesis NVIDIA. This has led to declining revenues for board manufacturers, already hard hit by lower demand due to the global recession.



GTX 280

ATI Radeon 4870

GTX 260 Core 216

ATI Radeon HD 4850

GTS 250

Stream Processors






Texture Address / Filtering

80 / 80




64 / 64







Core Clock






Memory Clock


900MHz GDDR5 (3600MHz eff)


993MHz GDDR3 (1986MHz eff)


Memory Bus Width






Frame Buffer






Transistor Count






Price Point






Comments     Threshold

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RE: Huh?
By Etsp on 3/11/2009 5:57:48 PM , Rating: 2
If all other variables are equal, yes, a larger core costs more.

Let's say we have two platters that are equal in cost, and are similar in every way. On one of them we produce the larger nvidia chip, on the other we produce the smaller ATI chip. Which platter is cheaper? Neither. Their costs are about the same. But, since the ATI chip is smaller, we can fit more of them on the platter, so we have more of the ATI chip than we do of the nvidia chip.

So, for the same cost, we have made more ATI chips than nvidia chips.

On top of that, we have the fact that the ATI chips will have less wasted platter space because of yields. If these two platters have a similar number of defects, it stands to reason that the two platters would have a similar number of defective chips. So, the nvidia and ATI platters have a similar number of defective chips, but the ATI platter has more chips in total. This means that the platter with the smaller ATI chips on it has better yields

(Of course, GPU's and CPU's usually have some redundant circuits to help improve yields, but lets ignore that for the sake of having less variables in this example...)

So, if all else is equal, the smaller ATI chip is cheaper to produce, AND has better yields.

The ATI RV770 has 956,000,000 Transistors.
The nvidia GT200 has 1,400,000,000 Transistors. The ATI chip is about 2/3 the size of the nvidia chip, so ATI produces about 30% more chips per platter. This difference is HUGE.

RE: Huh?
By Alexstarfire on 3/12/2009 6:42:10 PM , Rating: 2
Well no one is denying what you said. The problem is that in real life it's not like what you said at all. A straight 30% better yield is great, but if it takes 2 chips to compete with one nVidia chip then nVidia still wins. It would actually make the nVidia chip about 27% smaller if 2 of the ATI chips are needed. BTW, even though it's 30% smaller the yield difference could be bigger or smaller depending on wafer dimensions.

I'm not sure if you were talking about the GTX260 vs the HD4870 or GTX280 vs HD4870 though. I'm talking more about the latter.

RE: Huh?
By SiliconDoc on 3/13/09, Rating: -1
RE: Huh?
By Etsp on 3/14/2009 12:14:10 AM , Rating: 3
ATI is in a good position for the near future. You make references to a past fiscal year, before this core was released, and presume that those numbers imply the success, and/or profitability of this chip? Talk about foolishness...

Not to mention the fact that nothing in my entire post was even closely related to any rumor, or comment made by ATI/AMD, or even any press release, advertisement or any other form of marketing for that matter. It was conjecture based on the analysis of how silicon chips are made, and the given transistor counts of these cores. My entire post made no mention of profits, which was the focus of your attacks. Only costs.

I made no mention of the price point at which these cores are being sold because it was irrelevant to my statement. My whole point was that a smaller core is cheaper to produce when all other factors are equal.
You seem to think that this statement makes me an ATI fanboy... This is not the case, had the roles been reversed, and NVIDIA had been the one with the smaller chip, my post would have been almost identical.

On a side note, I must mention your incoherent diarrhea of the keyboard is quite distracting from the points you try to make. Try to get some help with that.

"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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