Building a GPU for the Masses

AMD put up this graph at its recent Financial Analyst Day:

The performance segment of the desktop CPU market is only about 7% of the pie and although it generates a disproportionately large amount of revenue it’s neither the biggest segment nor the biggest revenue generator in the market. That would be the mainstream segment.

ATI realized much of the same thing back in 2005. These high end GPUs were getting more and more expensive, while R300 tipped the scales at $399 over the coming years we’d see GPUs hit $499, $599 and go north of $600 at launch. The higher prices were due to increasing die sizes and techniques such as harvesting, ensuring that regardless of how big the GPU, revenues were protected.

A $399 R300 was close enough to the mainstream price points that ATI was able to scale it down months later to address other markets, but these days the time between the high end GPU introduction and the mainstream revisions of it has increased to 6 - 9 months. We still don’t have a mainstream derivative of NVIDIA’s GT200 architecture and chances are that we won’t until around 9 months after its introduction. With the GeForce GTX 280 launching at $600, for it to take 9 months to make a $200 derivative is doing the market a disservice in ATI’s eyes.

It was time to refocus. Instead of tailoring to the needs of the high end, ATI wanted to make a product that would be the best in the $200 - $300 range. To do so would mean that it would have to reverse the strategy that made it successful to begin with, and hope that somehow NVIDIA wouldn’t follow suit.

Re-evaluating Strategy, Creating the RV770 in 2005 The Bet, Would NVIDIA Take It?
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  • DerekWilson - Thursday, December 04, 2008 - link

    I'm glad you guys were able to stick to the plan an launch at the amazing prices you hit. It really shook up the industry and helped bring higher performance to lower price points. Now we just need the same thing to happen with integrated graphics.

    But seriously ... about those future architectures ... maybe you guys want to sit down and have another nice long chat? ;-)
    Reply
  • tygrus - Thursday, December 04, 2008 - link

    Choice A : Spend another 1B on a larger chip R&D, fab problems, low yields, high unit cost, potential delays, large dual-slot with space&cooling problems. Loose mid-range revenue potential, more R&D/time etc. to make half-size chip for mid-range.

    Choice B : Make the design to be price/power/performance efficient for very profitable mass-market. If you users want almost double the performance, buy 2 identical cards which saves on not producing a low volume BIG chip/card. (Though now we have 2 chips for X2 which still simplifies and reasonable efficient compared to a card design cramming a single BIG chip starved of bandwidth).
    Reply
  • CloudFire - Thursday, December 04, 2008 - link

    hands down one of the best, if not the best article i've ever read at anand. GREAT JOB! it shows how believing and getting back up when you're being beat down can get you where you want to be!

    for those people who took up the challenge to be different and change, imo are the true innovators who changes the world in the face of extreme adversity.
    Reply
  • Emperor88 - Thursday, December 04, 2008 - link

    Great artilce. There are precious few of these.

    Thanks a lot :)
    Reply
  • cowofdoom - Thursday, December 04, 2008 - link

    Long time reader, first time poster. Great article. I really think it says it all. Any time you get a chance to write articles like this I would love to see them. Great job. Reply
  • Emperor88 - Thursday, December 04, 2008 - link

    haha first time (wait second now) poster here as well. Best article I've read here. Reply
  • Barack Obama - Thursday, December 04, 2008 - link

    Keep it comin'! Reply
  • Boundless - Wednesday, December 03, 2008 - link

    Very nice article once again...helps reinforce my decision of keeping this place readily bookmarked since I first visited back in 2001. Reply
  • Regs - Wednesday, December 03, 2008 - link

    I want to know what AMD was thinking for those quite 3 years when they blew Prescott out of the water. Did they see Conroe coming? I think it's time for Anand to get on some black paint and go commando over there at AMD HQ. Reply
  • Cloudie - Wednesday, December 03, 2008 - link

    One of the best articles I've ever read. Kudos to Anand, and thanks to AMD (: Reply

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