If it Ain’t Broke...

The status quo is a dangerous thing. In 2005 ATI and NVIDIA were both sitting on a formula that worked: build the fastest GPU in the world (and provide solid drivers), and you’d win the market. By this point ATI had years of support to continue building GPUs this way, but there were a few within the company who believed it was time for a change.

In many ways ATI and NVIDIA were just taking different risks. NVIDIA had learned its lesson with transitioning to new manufacturing processes too quickly and would most likely build GT200 on an older, more mature process, burdening it with a huge die. ATI opted to do what NVIDIA wouldn’t and move to new manufacturing processes quicker, aiding it in producing GPUs with smaller dies.

With its only competitor hell bent on making bigger and bigger GPUs, ATI took care of half of the problem - it would be free to do whatever it’d like, without any real competition. The question then became - could it work?

It’s easy to, today, look back and say “of course” but you have to understand that this was 2005 and the first specifications of RV770 were being drafted. Imagine sitting at a table full of people whose jobs were supported by building the biggest GPUs in the world and suggesting that perhaps we sit this round out. Let NVIDIA take the crown, let them have the halo part, we’ll compete in the $200 - $300 market. Yeah, right.

What followed were heated debates, if ATI were to stake the future of its graphics business on not building the absolute faster GPU, but rather a GPU targeted at a lower market segment the proposition was risky.

ATI viewed the graphics market as five segments: Enthusiast, Performance, Balance, Mainstream and Value. In the Spring of 2005, ATI decided to shoot for the Performance segment, and not Enthusiast. You could even argue that the Performance segment is what the R300 competed in back in 2002, priced at $399 it was closer to the $299 MSRP of the Radeon HD 4870 than the $599 MSRP of the GeForce GTX 280 when it launched. But ATI viewed this as a change in strategy, while R300 aimed for performance regardless of die size, RV770 would have clear power and die size limits imposed on it.

There were many individuals at ATI that were responsible for the RV770 we know today getting green lighted. ATI’s Rick Bergman was willing to put himself and his career on the line, because if this didn’t work, he’d be one to blame. Carrell recalled a story where Rick Bergman and others were at a table discussing RV770; Rick turned to Matt Skynner and asked him if he thought they could really do it, if they could make RV770 a smaller-than-NVIDIA GPU and still be successful, if it was possible to create a halo in the Performance segment. Matt apparently pondered the question, turned to Rick and said “I think we can”. Carrell felt that ATI might not have gone down that path if it weren’t for Matt Skynner’s support and Rick Bergman making sure that the project was executed as well as it ended up being.

It was far from rosy at that point however, there were many very smart engineers, people who were responsible for things like R300 and R580 who disagreed with the strategy. People who had been right before were saying that if ATI didn’t build a true competitor to GT200 that the fight would be over. Then you had folks like Carrell saying that it could be done, that this was absolutely the right move. It’s much like the passion of politics, each side believed that they were right, but ultimately you can only pick one - and both sides have to live under the same roof.

The Bet, Would NVIDIA Take It? The Power Paradigm
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  • pastyface - Wednesday, December 3, 2008 - link

    Great job on the article! Generally today's reviews consist of me quickly going to the benchmarks portion and seeing if a new game was used or if any screwy results came out. This article however was much different. You had my attention from the get go and I didn't take a break in my reading until the whole article was finished.

    It is a real shame that so much of the work in reviews are overlooked in favor of simple graphs but this article was different and I thank you for that.
  • MarchTheMonth - Wednesday, December 3, 2008 - link

    I really enjoyed the read, and it really gives me an appreciation for the card i just happen to get (hd 4850).

    I may not speak for others, but these are the kind of articles I like to read, the kind that really explain in detail what's really happening. Anand, you did an excellent job of giving perspective (be in ATI's shoes in 2007 when nvidia was doing this...etc) to the article that gave definition between the "so obvious" hindsight we have now to the "this is suicide!" view that it must have seemed like to be there in 2005.

    Now, for my own counter-perspective, I can understand why AMD, Intel, and nVidia may not do this very often. On the flip side of the coin, I'm not a mainstream user, and I don't exactly build 1000s of computers that ATI can sell. Bottom line speaking, a story that's interesting to me, I don't bring them $$$$. And on top of that, this story is also giving a lot of info to the competition, which can be at best a double edged sword, and at worst too much information to be self-destructive.
  • belladog - Wednesday, December 3, 2008 - link

    Excellent article, we love this stuff. Benchmarks gets a bit boring after a while.

    I wonder what affect if any, the revelations about price fixing(between ATI and Nvidia) had on the pricing of the RV770 GPU's??

    I mean if the lawyers hadnt broken up the party maybe the 4870 could have been $80-$100 dearer?

    Anyway, interesting article.
  • Griswold - Wednesday, December 3, 2008 - link

    The price fixing took part before AMD bought ATI. And it would be safe to assume that it stopped at the latest at that time, but it probably did stop well before that (the earliest evidence is an e-mail from 2002). AMD should know better than to point the finger at Intel and do something that is equally wrong in another segment of their business.
  • feelingshorter - Wednesday, December 3, 2008 - link


    Keep up the good work and never let the haters get you down! There's always people b!tching when they don't know how hard it is to write well (any moron can "write"). But its good stories like this that has been the bread and butter of Anandtech.

    The pressure of deadlines, writer's block, or not having enough to write. I appreciate what you do and I know its stressful at times. Others can sympathize but I can empathize having been an amateur journalist myself (in high school and at the university newspaper).
  • san1s - Wednesday, December 3, 2008 - link

    If this article was about an nvidia GPU then the ati fanboys would proclaim it reeks of bias.
    good article though anamdtech
  • Adul - Wednesday, December 3, 2008 - link

    That was one of the best article I read in a while. It was very enjoyable to get an idea of how things are worked out years in advanced of when the product launches.

    This was a huge gamble on AMD/ATI part. My hats off to them for having the balls to do something different.
  • dani31 - Wednesday, December 3, 2008 - link

    Speaking of AMD, it would have been nice to have more insight on how the acquisition of ATI fitted in the design process.

    But this topic seems to have been deliberately omitted in this article.
  • JonnyDough - Wednesday, December 3, 2008 - link

    Maybe that's because the interviewed the ATI chip designers and not the AMD head haunchos? Just a thought.
  • lifeobry - Wednesday, December 3, 2008 - link

    Really fascinating article. The amount of work put into creating these cards and the competition between the two companies is compelling stuff.

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