Nowadays graphics processors are extremely complex, powerful, capable of rendering cinematic graphics, but are terribly expensive, whereas the market of discrete graphics cards shrinks. Since companies like ATI or NVIDIA already spend hundreds of million dollars on development of graphics architecture, in order to return the investments and maintain the prior pace on innovation they either need to sell considerably more of their graphics chips or slower the pace and maintain the same level of R&D investments of slightly more than 10%.

Both ATI Technologies and NVIDIA sustained 12 to 18 months architecture cycles in the past and we saw a totally new product coming out once a year and its improved version coming out a little bit afterwards. Due to high R&D costs and overall condition of the personal computer market ATI decided to lengthen its architecture cycle to 18 to 24 months instead of 12 to18 months, David Orton, ATI Technologies’ President and COO said last month. Currently it is not known whether NVIDIA will follow this step or not, but I can remind you that it passed roughly 18 months between the NV10 and the NV20 architectures and the path from the NV20 to the NV30 took another 18 months if we consider announcement dates.

Rumours about possible delay of the R400 architecture based on Mr. Orton’s statement started to emerge  around the Web after the story had been published in BusinessWeek. Furthermore, Dave Rolston, ATI's VP of engineering said during the Goldman Sachs Technology Investment Symposium in late February that the R350 graphics processor (or the RADEON 9800) "will ensure ATI's leadership position on the market, at least, in this calendar year", what also could allude observers on the fact that we are not going to see the next-generation high-end graphics processor from ATI, dubbed R400, this year, but it will only come out in July 2004, approximately 24 months after the R300 was announced. This contradicted the roadmap seen by X-bit labs, where it was shown that the R400 is slated to come this Fall. After asking some of our friends around the industry we realized that ATI Technologies will continue to offer incremental improvements in existing products every six to nine months, while architecture cycles are to be lengthened. So, expect more products from ATI to come out later this year, but at this time I am not so sure that the higher-end product you expect will be the desired R400 or the totally redesigned and reworked R300/R350 functioning at higher core-clocks, featuring DDR-II SDRAM memory, offering more performance and more features due to major architecture improvements (even major rework of architecture is still easier and cheaper than development of something brand-new) and so on.

We still do not know if ATI’s R400 will come out in 24 months after the R300, or it will still emerge this Fall, but we can be almost sure that ATI will be offering higher-end graphics solutions later this year in order to compete with the rival’s products.