NVIDIA Corporation is offering tasty and lucrative discounts on its graphics processors to its add-in cards manufacturing partners in order to boost its quarter sales. The move may reduce the average price of graphics cards, but may also encourage makers to buy large batches of memory, what may cause an uncontrollable uptick in its price.

Santa Clara, California-based graphics powerhouse is offering discounts of 10%-20% to graphics card makers, with the goal of clearing out several million graphics processing units from inventory before the end of the first quarter of fiscal 2005, which ends April 30, DigiTimes web-site reports. Among the special packages NVIDIA is offering till the end of April, 2004 is the bundle that costs $87 and contains the GeForce FX 5200 and 5700 LE graphics processors.

Some graphics cards makers are pretty positive about the intention of NVIDIA to reduce the pricing on certain SKUs, as it consequentially lowers the final price of their graphics cards and improves their competitiveness. Other makers of add-in cards are worried about additional demand for DRAM which price has been rising recently. In case the demand for RAM is too high, memory makers may start charging more for every chip, which will affect the final prices of graphics cards and play a negative role.

The total GPU inventory to be liquidated by NVIDIA has a value of about $80 million, compared with an average of $50 million worth of inventory the company had cleared out in previous fiscal years, said the sources of DigiTimes.

It is not clear whether NVIDIA’s rival ATI plans to respond with price-cut.

Officials from NVIDIA declined to comment on the information, but said the company’s business is on-track.