ATI Technologies, a leading developer of graphics and consumer electronics chips, is expected to roll-out its own bridge solution to allow PCI Express graphics processors to work in AGP systems. The maneuver will reproduce approach of arch-rival NVIDIA Corp. to set AGP graphics processing units to function with PCI Express x16 systems.

“ATI’s Rialto is a bridge chip for AGP graphics cards based on visual processing units with PCI Express x16 interconnection,” a well-informed source close to the company told X-bit labs Tuesday.

The code-named Rialto chip is expected to be produced at one of ATI’s partners among contract chipmakers in the fourth quarter of the year, but it is unclear when the actual products featuring the chip are expected to hit the shelves of the stores.

Typically new personal computers with PCI Express x16 bus for graphics cannot work with AGP 8x graphics cards. Older systems with AGP bus also cannot handle PCI Express x16 add-in boards. For makers of graphics chips it means they either have to ship two product lineups, which may be inefficient from economic standpoint, or develop a special bridge that will allow to use the same GPUs to power different graphics cards.

Currently ATI remains tight-lipped over details concerning the Rialto chip specifications. It is unclear whether the Rialto will be able to work in both directions, e.g. to transform PCI Express signals into AGP signals and vice versa. NVIDIA’s BR02 bridge chip can work in two modes, allowing graphics chip designer NVIDIA Corp.’s GeForce FX processors that were designed for AGP systems to plug into newer PCI Express-enabled computers and the latest GeForce 6600 graphics processors to operate within AGP 8x systems.

A chip that turns PCI Express signals to AGP signals would allow ATI’s PCI Express VPUs, such as RADEON X300, RADEON X700 or newer to work in AGP systems. If the chip is able to transform AGP signals into PCI Express signals, ATI will also be able to address PCI Express market with AGP 8x chips, however, in the past ATI denounced such move of its opponent NVIDIA and may not go this route.

Official representatives for ATI Technologies did not comment on the news-story.