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ATI Technologies’ co-founder and CEO, Mr. KY Ho said last week that his company was planning a very aggressive transition to 0.13 and 0.11 micron fabrication technologies. This is the first claim of such kind coming from an ATI top executive, as the company is generally very cautious and its decision not to manufacture the high-end RADEON 9700-, 9800-series of graphic processors using 0.13 micron technology, but stick to mature 0.15 micron process, allowed the firm to leave its main rival NVIDIA behind in terms of performance and production costs.

“We do not have any problems with 0.13 margins. Actually, it is the opposite. We want to go into 0.13 and 0.11 very aggressively. If it was creating pressure, I don't think we would be banging our heads against the wall,” KY Ho told Reuters in an interview during Computex Taipei 2003 trade-show.

NVIDIA’s executives blamed high production costs of the 0.13 micron GeForce FX GPUs for the company’s lowering gross margins a number of times this year. However, it now looks like the problem is not totally in TSMC’s 0.13 micron technology, but also in NVIDIA’s own design of the chips.

Transition to 0.11 micron technology will probably start in the second half of 2004, about a year and a half after the first 0.13 micron chips left TSMC foundry. Hence, all next-generation ATI’s VPUs will be made using 0.13 micron technology, while the future generation graphics products, such as code-named ATI R500, will be manufactured using 0.11 micron technology. It is also possible that ATI will make a less complex graphics processor for mainstream or value market segment using 0.11 micron technology for evaluation the process in the second half 2004.

Currently ATI makes its VPUs at TSMC and UMC foundries located in Taiwan. Officially, the company has no plans to make its graphics processors at IBM or different contract manufacturers.

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