Nvidia was expected to have its NV30 processor, to be sold as the GeForce 5, on the market by now. But problems stemming from shifting to a new chipmaking process have bumped back the chip by several months. Analysts now expect Nvidia to have a handful of new chips on the market by Christmas, but volume shipments won?t begin until early next year.
Rival ATI Technologies, meanwhile, has beenPC hot-rodders for several months with its Radeon 9700 processor. By the time the new Nvidia chip is widely available, many are likely to have already made the switch to ATI, analysts say.
"Basically, they missed the cycle," Hans Mosesmann, a Prudential Securities analyst, said of Nvidia. "Really (the NV30) is a fall product that's now been pushed out for all intents and purposes to the spring."
Once NV30 products do appear, they?re likely to be 25 percent to 50 percent faster than the Radeon 9700--not enough of a boost to get people to switch, Mosesmann said. That's partly because many of the immediate advances expected in PC graphics depend on programming instructions built into DirectX 9, the upcoming version of Microsoft's PC graphics library. The Radeon 9700 was built to support those functions.
The NV30 "is a great product," Mosesmann said. "It's going to be better, but not good enough...It's going to have to be twice as fast as the 9700 for people to look at it and think about switching."
Nvidia representatives declined to comment, citing company policy against commenting on products before they're officially announced.
Graphics chips used to be one of the most hotly contested segments of the PC industry, with more than a dozen companies offering competing chips. The market has shrunk drastically in the past few years, however, with Nvidia maintaining a wideover rival and one-time champ ATI.
The Radeon 9700 has given a significant boost to ATI's prospects, however, one that will grow in significance the longer it takes for Nvidia to release a rival to the ATI chip. ATI also began courting more mainstream consumers Thursday with the release of the Radeon 9500, a slightly stripped-down version of the 9700 that will sell for $200 or less, about half the price of 9700 cards.
"We've got a horse race again," said Dean McCarron, a Mercury Research analyst.
Pinning hopes on the holidays
Nvidia originally the NV30 would be widely available by now. Analysts now expect that at best a few thousand high-end video cards using the chip will be available before Christmas.
PC manufacturers reportedly have just received samples of the chip and may show demonstration PCs--including models running Advanced Micro Devices' Alienware, will contain the chip and AMD's Athlon XP 2800+ this year.Athlon processors--at the Comdex trade show, running the week of Nov. 18 in Las Vegas. But retail shipments of PCs running the NV30 are unlikely to materialize until several months into 2003--a traditionally weak time of the year for PC sales. Some PCs, however, from specialty manufacturers such as
The delays largely stem from Nvidia's decision to design the chip based on advanced, new chipmaking techniques, most notably the 130-nanometer manufacturing process. The measurement refers to the average size of features on the chip. Chip foundry Taiwan Semiconductor Manufacturing Corp. (TSMC), which manufactures Nvidia's chips, has experienced difficulty with the shift from 180- and 150-nanometer manufacturing.
"It's being manufactured on the newest process TSMC has to offer, and that process was not ready to go into high volume until just recently," McCarron said. "To Nvidia's credit, they probably took the time to do some design tweaks, but it has definitely meant delays."
Peter Glaskowsky, editor in chief of industry newsletter Microprocessor Report, said waste is always an issue with new manufacturing techniques. "The issue right now is yield, how many good chips do you get per wafer," he said.
Glaskowsky noted that the NV30 is a big chip compared with previous 0.13-micron products such as memory chips, making yield issues more critical.
Big chip, small output
"This is a part," he said. "That means the number of dies per wafer is relatively low compared to a little memory chip. That just makes it much more sensitive to yield."
Nvidia CEO Jen-Hsun Huang defended the shift to 130 nanometer in August, during the company?s second-quarter earnings conference call with financial analysts. "Until we get this architecture into 0.13 micron, it's really impossible to deliver...the look and feel you expect from a next-generation product," he said. "We were the first at (150 nanometer) and it wasn?t easy. Going into any new technology isn?t easy, but I think the results are worth it."
ATI opted to build the Radeon 9700 on the 150-nanometer process, a decision that meant bigger chips but ones that outperformed Nvidia's current generation of GeForce 4 chips and made it to the market well before the GeForce 5.
"Whatever you think about ATI, the management made a very shrewd decision," Mosesmann said. "They decided 0.13 micron wasn't going to be there...If they would have gone to 0.13 micron, it would have been a disaster. Nvidia can afford to work out problems like that, but it would have killed ATI."
ATI did not respond to requests for comment.
The upshot is that for now and the next several months, those who want the fastest graphics will be driven to ATI. Suchare a small but significant part of the PC market, especially for graphics chipmakers, who rely on such customers to pay a premium for the latest and best. For now, ATI has the advantage with the few million customers willing to pay $400 for a high-end graphics card.
"This is the price point of the market where they make the most money, and any delay there can mean lost sales," Glaskowsky said. "Some customers will wait for Nvidia; some of them will say, 'If I can't get a GeForce 5 before Christmas, I'm just going to get a Radeon 9700.' A lot of people understand it's going to be good enough for them."
"It's not like the whole market is going to shift to ATI," Mosesmann added. "But they're there to stay, and you're going to see more evenly matched competition at the high end."