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Meanwhile S3 Graphics and XGI Technology still do not supply any affordable DirectX 9.0 graphics cards, NVIDIA and ATI intend to penetrate the market with more competitive and more affordable offerings, market rumours suggest.

According to the latest rumours, ATI wants to gradually lower pricing of its RADEON 9600 SE and RADEON 9800 SE SKUs, while NVIDIA feels pretty confident with its GeForce FX 5200, GeForce FX 5600 XT and even plans to roll-out a new cost-effective product called GeForce FX 5700 LE.

According to the most-recent Mercury Research study, NVIDIA strengthened its positions in the market of Value DirectX 9.0 graphics cards. Since the company has been supplying its GeForce FX 5200 as inexpensive DirectX 9.0 SKU since Spring 2003, while ATI Technologies was so focused on expensive DirectX 9.0 solutions that even did not develop any chips to compete against the popular 5200 series from the Santa Clara, California-based company in terms of features, NVIDIA’s growth in Value DirectX 9.0 segment is quite natural.

NVIDIA’s GeForce FX 5600 XT is a cut-down version of the GeForce FX 5600, clocked at 235/400MHz for core/memory. The part is available with 64-bit or 128-bit memory and does not replace, but complements the GeForce FX 5200 lineup. The GeForce FX 5700 LE solution will also be a sort of NV36 technology, but mounted on low-cost PCB and with clock-speeds in the range of 400MHz.

ATI Technologies’ RADEON 9600 SE is a version of the RADEON 9600 clocked at 325/400MHz for VPU/memory, but with 64-bit memory controller.

Generally speaking, none of the value DirectX 9.0 offerings can boast with really high speed in 3D, not talking about complex next-generation titles. The RADEON 9800 SE is the only cut-down DirectX 9.0 visual processing unit that allows playing demanding titles. However, the 9800 SE is priced from $150 to $200 what does not allow to call it “value DX9”.

Since the market of high-performance DirectX 9.0 products is not really large, while affordable graphics cards account for larger share of the PC market, it definitely now makes sense to address it with some new products. But it may be a bit tricky for both NVIDIA and ATI. Both companies have not developed relatively fast, but enough cost-effective products, which is why the two companies are likely to drive lower-clocked performance-mainstream or even high-end chips down to the segment of $70 to $130.

According to a DigiTimes report, ATI Technologies recently slashed the price of its RADEON 9600 SE chip by about $10, from over $40 earlier. Moreover, TweakPC said that 128MB RADEON 9800 SE graphics cards from Palit would soon be available at 149 Euro in Europe. Given that the RADEON 9800 SE is a strong competitor for ATI’s RADEON 9600 series (and probably for GeForce FX 5600, 5700 families), it is possible to expect further price-cuts from ATI and, maybe, NVIDIA. This may impact the company’s gross-margins and revenues unless the yields and costs are going down for the company, though, it will ensure that ATI’s market share will grow.

NVIDIA, who is likely to continue offering its GeForce FX 5200 and GeForce4 MX for the low-end, as well as substitute the GeForce FX 5600 XT with the more advanced 5700 XT is not likely to suffer from tangibly stronger price pressures in case there are no overall problems with yields and costs of such products.

To sum up, both leading graphics chip makers are trying to flood the low-end and mainstream market segments with DirectX 9.0 chips, as previous generation processors disappear from the market. NVIDIA is fairly more successful here, but both companies will be pretty hard to manage their margins and product offerings, as the demand for relatively high-performance solutions in $70-$130 segment increases with the introduction of future graphics processors. Still, this all is good for consumers, who will be able to get more speed for lower price.

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