ATI Expects Graphics Chip Market to Be Impacted by Economy Crisis

Economic Slump May Affect Sales of Graphics Cards - Head of AMD's Graphics Product Group

by Anton Shilov
12/03/2008 | 12:40 PM

The general manager of ATI, graphics product group of Advanced Micro Devices, said in an interview that although the market of discrete graphics processors remains strong, the economy slump is highly-likely to impact its negatively as consumers are cutting their expenses.

 

“I don’t know if graphics will be singled out in terms of impact [of economic slump]. We are heavy on the consumer side compared to the enterprise. Everyone in the world is hanging on to see how bad the storm will be in the quarter and going forward,” said Rick Bergman, a vice president of AMD and general manager of graphics products group, in an interview with Venture Beat web-site.

It is hardly surprising that the head of ATI remains cautious. According to estimates of Craig Berger, a chip analyst at Friedman Billings Ramsey, Nvidia Corp., the arch-rival of ATI, plans to reduce the number of wafer starts (which means reduction of chip manufacturing) by 25% in Q4 2008, and further reduce production by 20% in Q1 2009.

Rick Berger remains optimistic about the future of discrete graphics chips, but regrets that consumers are not investing heavily into graphics cards required for video-games due to current state of the world’s economy.

“Yes, we’re feeling good. I wish the economy were better. We have a strong product line. The amplitude of our gains would be higher if the market was stronger. But the flip side is that you better have a good lineup in a slow market or things will get ugly,” said Mr. Berger.

Earlier this year ATI/AMD set itself a goal to capture 50% of the global market of standalone desktop graphics chips in the fourth quarter. In Q3 2008 the company commanded 40%, whereas 60% of the market was captured by Nvidia.