Price war: Bargain ATI graphics card serves notice to Nvidia

ATI Technologies Inc.'s new Radeon HD 4770 graphics processor launched earlier this week, receiving plaudits for incorporating cutting-edge technology at a ground-breaking price.

The 4770 GPU, used in add-in graphic cards, is the first graphics chip to use 40 nanometer technology. 40 nm is a more miniaturized technology than the 55 nm silicon used in most other GPUs. All things being equal, that allows a GPU to incorporate more transistors for faster performance while running cooler and drawing less power.

The 4770 boasts 826 million transistors powering 640 cores, or what ATI calls "stream processors," running at 750 MHz. That delivers close to 1 teraflop (960 gigaflops) of performance while consuming a maximum of 80 watts of power.

Multimillion dollar supercomputers with thousands of CPUs didn't start to pass 1 teraflop until the late 1990s.

By comparison, 4770 graphic cards will cost US$109 when they are released, with a limited-time $10 mail-in rebate from ATI, the Advanced Micro Devices Inc. subsidiary, bringing the price down to $99.

Some third-party testing has the Radeon HD 4770 beating more expensive competitors from rival Nvidia Inc.

According to tests conducted by graphics chip market research firm, Jon Peddie Research, the ATI chip beat a high-end Nvidia Geforce 9800 GTX in raw performance (3DMark Vantage scores). The 4770's margin of victory was heightened when price and energy usage were also factored in (cards using the Nvidia chip range from $130 to more than $300).

"The Radeon 4770 is an amazing amount of product for an amazingly low price," wrote Robert Dow and Alex Garovi, analysts with JPR. "It will set a new standard for the industry and challenge low price suppliers like Matrox and VIA/S3."

ZDNet blogger Adrian Kingsley-Hughes went further, calling the 4770 and its $99 price the "new 'high end' for GPUs."

The HD 4770 is "as far as most gamers are concerned, the highest-end graphics card they need," Kingsley-Hughes wrote.

The Radeon HD 4770 could provide a much-needed boost for ATI. ATI's first-quarter chip shipments were down 27.5% year-over-year, according to JPR, giving it 17.1% of the market, behind Nvidia's 31.1% and market leader Intel's 49.7%.

Intel's leadership comes from its domination of the larger integrated segment of the GPU market. It won't launch its first GPU for more-powerful add-in cards, Larrabee, until early next year.

Nvidia still leads the add-in graphics card segment. Boards using chips such as its GTX 295 cost $500 or more.

Nvidia calls the idea that hard-core gamers will be satisfied with a $99 card ridiculous.

"You of course would be limited in performance at high resolutions, features, and additional functionality outside of traditional 3D game rendering, namely things that use the GPU for other purposes - transcoding, video manipulation, protein folding, physics calculations, etc.," wrote an Nvidia spokesman in an e-mail.

Moderate gamers may feel "the price point is appealing," he conceded, but "hardcore gamers of course, want to drive up the resolution and turn on all of the eye candy at the same time."

"We don't anticipate any price moves as our GTS 250 is faster than the Radeon 4770 and also offers more features including support for things like NVIDIA PhysX, CUDA and 3D Vision technologies, features that AMD does not and cannot offer," he continued.

PhysX, an Nvidia-only technology that renders on-screen action more realistic, is being adopted by several upcoming games, such as Terminator Salvation, he said.

Nvidia also cast doubt on the 4770's near-term availability, due to the newness of the 40 nm technology.

"We expect AMD will have difficulty providing volume shipments of 40nm boards at this time," wrote the spokesman. Nvidia plans to release its own 40 nm graphics chips in the summer, "when we are certain there will not be supply issues for our channel partners."

ATI says that shipments of the HD 4770, while smaller than normal for launch, will not be delayed, according to JPR.

"If there is a shortfall, it will be brief as ATI tells us they have lots of chips coming," wrote Dow and Garovi.