Advanced Micro Devices revealed during its Analyst Day that it has no plans to release a new family of graphics processing units (GPUs) in 2008, as planned. The decision seems to support the general plan to cut capital expenditures in order to return to profitability, but pose a lot of threat to performance of the firm’s graphics product group, the former ATI Technologies.

Rick Bergman, who is senior vice president and general manager of AMD graphics products group (GPG), did not talk about long-term future of the former ATI business, the Radeon GPUs; but concentrated on talking about current achievements of AMD/ATI, ATI CrossFire X technology as well as products of not-too-distant future, namely ATI R680, ATI RV620 and ATI RV635.

Nevertheless, Mario Rivas, who is executive vice president of computing solutions group revealed in his presentation that the code-named ATI R700-family of products will only be available in 2009.

Apparently, AMD’s next-generation Leo platform, the successor of current Spider platform, will only feature code-named ATI R6xx (ATI Radeon HD 2000-series and ATI Radeon HD 3000-series graphics cards) graphics adapters. The AMD Leo platform is due in 2008, whereas its successor – the so-called AMD Leo Refresh platform – that is scheduled to arrive in 2009 will sport code-named ATI R7xx graphics cards. In addition, ATI R700-series graphics will be featured with Kodiak and Cartwheel platforms, which are also scheduled to debut in 2009.

Earlier this year AMD’s Rick Bergman said that Leo platform will have a new core-logic (AMD RD800-series) as well as “a new high-end GPU family as well”. But AMD decided not to release its AMD RD800-series chipsets in 2008 as well as the new GPU family. As a consequence, the new platform for enthusiasts will have to rely on AMD 780-/790-series chipsets as well as ATI Radeon HD 3800 X2 graphics boards, the currently available technology. Basically, the key feature of Leo platforms seems to be AMD Phenom processor made using 45nm process technology with build-in DDR3 memory controller.

Even though with DirectX 10.1-supporting graphics processing units (GPUs) available ATI/AMD does not need to update feature-set of its graphics chips until the new Microsoft Windows operating system with new DirectX 11 comes out, AMD tremendously needs to increase performance of its GPUs dramatically in order to stay competitive in general and in the high-end high-margin segment in particular. Without ATI R700, AMD will have to offer its graphics products only in the price-sensitive markets, as it happens presently due to the fact that Nvidia Corp. captured the whole market of graphics cards that cost 400 and upwards. If Nvidia releases a new family of GPUs in 2008, AMD will have to withdraw even from the markets where it does compete now.

The reasons behind the delay of ATI R700 are unclear, but are believed to be related to AMD’s intention to cut down the research and development (R&D) expenses. The consequences of the decision may be dramatic, if not fatal, to AMD’s graphics product group, as state-of-the-art graphics technologies not only enable graphics cards that retail for the price as high as $849, but also open the door to video game consoles, which sell in hundreds of millions quantities.