ATI, graphics products group of Advanced Micro Devices, declared its plan to lead the market with its next-generation DirectX 11-supporting graphics processing units. The company also said it would release its new graphics chips by the time Microsoft Corp.’s Windows 7 hits the market.

“We plan to lead the market with DirectX 11 solutions coincident with Microsoft Windows 7 release in the back half of the year,” said Dirk Meyer, chief executive officer and president of AMD, during a conference call with financial analysts.

Sales of graphics cards collapsed both in Q4 2008 and in Q1 2009 because of lowering demand due to the global recession. AMD needs new breed of graphics processors along with Windows 7 and DirectX 11 in order to see increased demand towards better-performing graphics sub-systems.

“With Windows 7 being released in the back half of this year and all the benefits that come along with that in the form of DirectX 11 and improved graphics quality, compute offload and so on, we might see a spike in interest for a richer graphics experience. Certainly, that is one of the things that we are trying to drive as a company,” said Robert Rivet, chief financial officer of Advanced Micro Devices.

Last week rumours transpired that ATI may release its code-named RV870 graphics chip in late July. The RV870 is AMD’s first DirectX 11-supporting graphics processing unit.

AMD reported revenue for the first quarter of 2009 of $1.177 billion. First quarter 2009 revenue was flat compared to the fourth quarter of 2008 ($1.162 billion) and decreased 21% compared to the first quarter of 2008. AMD reported a net loss attributable to AMD common stockholders of $416 million or $0.66 per share.

Sales of central processing units were up 7% to $938 million amid decrease of average selling price and increased amount of units sold, whereas sales of graphics processors were down 18% to $222 million amid declines in both units and average selling prices.

Tags: ATI, AMD, Radeon, DirectX, Microsoft, Windows, RV870