ATI, a division of AMD that develops graphics processing units (GPUs) and core-logic sets, is expected to allow graphics boards makers to design and produce certain high-end graphics boards on their own manufacturing facilities. The move is likely to make AMD’s graphics chips more popular among manufacturers and consequently end-users.

For several years now both ATI Technologies and Nvidia Corp. did not sell chips for high-end boards to its partners, but supplied graphics cards already made under GPU developer’s supervision by a contract manufacturer. While such business model ensures that end-users get quality high-end graphics adapters, this reduces choice and competitive advantages add-in card manufactures may offer to their customers.

According to a news-story by HKEPC web-site, AMD has decided to allow manufacturers of graphics boards to produce Radeon X1950 XT graphics cards using their own design and manufacturing capacities. The Radeon X1950 XTX boards will still be made under supervision of ATI.

The move is likely to make the Radeon X1950 XT products more popular among producers of graphics boards, who will be able to differentiate themselves from each other by utilizing own design of print circuit boards and cooling solutions. Theoretically, quality on some of the boards tailored for being very cost efficient may be sacrificed. However, it is claimed that AMD will validate custom designs by add-in board partners, so, customers will still have some kind of quality approval.

Graphics division of AMD has been losing ground in both desktop and mobile segments for a couple of quarters now with biggest drops reported in the Q3 2006. Currently ATI controls 22% of the desktop market, while Nvidia commands 25%. In the discrete desktop segment, Nvidia has 57% market share and ATI claimed 43% share during the period. For AMD/ATI it is crucial to make its products more appealing to end-users.

AMD is expected to release its high-end code-named R600 visual processing unit in January or February, but given that the high-end graphics boards that cost from $499 to $649 are not sold in high quantities, the company needs to solidify its positions in $199 - $299 segment, where currently the firm supplies Radeon X1900 XT 256MB product for $299 to compete against GeForce 7950 GT at the same price-point.

The Radeon X1950 XT is a product that was not officially unveiled by ATI or AMD. Nevertheless, it is known that it will feature R580+ at 625MHz with 48 pixel shader processors and 8 vertex shader processors, equipped with GDDR4 memory at 1.80GHz clock-speed.