The Beginning: The Shot Heard Around the World

It all started back in 2001 when ATI, independent at the time, was working on the R300 GPU (Radeon 9700 Pro). If you were following the industry at all back then, you’d never forget the R300. NVIDIA was steadily gaining steam and nothing ATI could do was enough to dethrone the king. The original Radeon was a nice attempt but poor drivers and no real performance advantage kept NVIDIA customers loyal. The Radeon 8500 wasn’t good at all; there was just no beating NVIDIA’s GeForce4, the Ti 4200 did well in the mainstream market and the Ti 4600 was king of the high end.

While ATI was taking punches with the original Radeon and Radeon 8500, internally the company decided that in order to win the market - it had to win the halo. If ATI could produce the fastest GPU, it would get the brand recognition and loyalty necessary to not only sell those high end GPUs but also lower end models at cheaper price points. The GPU would hit the high end first, but within the next 6 - 12 months we’d see derivatives for lower market segments. One important takeaway is that at this point, the high end of the market was $399 - keep that in mind.

With everyone at ATI thinking that they had to make the fastest GPU in the world in order to beat NVIDIA, the successor to the Radeon 8500 was going to be a big GPU. The Radeon 8500 was built on a 0.15-micron manufacturing process and had around 60M transistors; R300 was going to be built on the same process, but with 110M transistors - nearly twice that of the 8500 without a die shrink.

Its competition, the GeForce4 was still only a 63M transistor chip and even NVIDIA didn’t dare to build something so big on the 150nm node, the GF4 successor would wait for 130nm.

We all know how the story unfolded from here. The R300 was eventually branded the ATI Radeon 9700 Pro and mopped the floor with the GeForce4. What Intel did to AMD with Conroe, ATI did to NVIDIA with R300 - back in 2002.

The success with R300 solidified ATI’s strategy: in order to beat NVIDIA, it had to keep pushing the envelope for chip size. Each subsequent GPU would have to be bigger and faster at the high end. Begun these GPU wars had.

Index Re-evaluating Strategy, Creating the RV770 in 2005
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  • yourwhiteshadow - Thursday, December 4, 2008 - link

    absolutely brilliant. i've always read anandtech instead of tomshardware because of objective reviews. i was reading an intel review, and people were questioning the objectivity of anandtech. while some might could look at this as praising ATI/AMD, i would definitely say this was a very objective view of what happened. seriously, one of the BEST articles i've read since the 4850/4870 review. Reply
  • kevyeoh - Thursday, December 4, 2008 - link

    I've been reading anandtech for years and there wasn't any article that makes me wanna read every single word of it. Usually i will read the forewords and then skip on to the Conclusion. But for this article, i really read every single words! period! Anandtech rocks! Reply
  • nitemareglitch - Thursday, December 4, 2008 - link

    I was actually getting a little bored with the articles around here, until I read this one. Great job, I loved reading this story!! Reply
  • lchyi - Thursday, December 4, 2008 - link

    This is by far the best (and most insightful) article I have read here to date Anand. It sounds like you put in a ton of thought to it and I have never flown through 7,500 words as quick as that read. Congrats to the ATI guys for their successful gamble on the RV770. The last three years must have been an extremely interesting experience for them and their engineers. Reply
  • joshjnm - Thursday, December 4, 2008 - link

    Great article I will bandwagon with the rest of you and agree this is one of the best articles I've read in a while.

    Reply
  • josh6079 - Thursday, December 4, 2008 - link

    I thoroughly enjoyed the article. Last time I was really involved with graphics cards was when the X1900's were in full swing and G80 was on everyone's mind. The history told in the article helped bring me up to pace as to what has transpired since I stopped gaming as much. I can remember how the Video card section used to be here on the forums with the trolls and constant flames. Two camps of people cheered on for one or the other competitors instead of realizing that they should be cheering for competition itself.

    Great job ATI, Nvidia - what's next?
    Reply
  • Seikent - Thursday, December 4, 2008 - link

    Very good article, most of these interesting background stories are written in books, but a lot of years latter.

    Something, that is not mentioned, is that it seems that AMD didn't affect ATI in any way (technically speaking). Many thought that the R600 failure had something to do with AMD.
    Reply
  • BSMonitor - Thursday, December 4, 2008 - link

    Awesome article.

    I am definately a performance/mainstream kinda guy in this market. Definately love the competition. I started my first build with a Geforce 4200Ti, moved up to the infamous 9700Pro, followed by X1900, and now 4850HD...

    It is good to see that the ATI/AMD didn't damage ATI as a whole. Rock on guys! Love those cheap kick ass Crossfire cards! Go 4850HD x2.
    Reply
  • dmer - Thursday, December 4, 2008 - link

    as a long time reader of anand I never felt the need to register an account; however, after reading your article I felt compelled to create an account just to commend you on an excellent article.

    we need more articles that give us insight into business decisions like this. job well done mate!
    Reply
  • johnkwright - Thursday, December 4, 2008 - link

    Anand,

    I've been a long time reader of AnandTech but I especially liked this article. It was interesting to get a peek behind the curtain to see what challenges companies face when making these tough decisions. Hopefully more companies take a chance and share more of their stories with this site. Keep up the good work.

    Regards,
    John Wright
    Reply

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