Nvidia Corp., the world’s largest developer of graphics processing units, has reportedly contacted makers of graphics cards and recommended them to redesign Nvidia GeForce 8800 GT graphics cards in order to slash their pricing so that to more successfully compete against ATI’s recently launched ATI Radeon HD 3800-series products.

Add-in card partners of Nvidia Corp. were told to start using 6-layer print-circuit boards instead of 10-layer print-circuit boards (PCBs) on their GeForce 8800 GT-powered graphics cards. The switch, according to DigiTimes web-site, is likely to drop manufacturing costs by $10, which would allow to reduce retail pricing of Nvidia GeForce 8800 GT products on the market.

According to the media report, ATI Radeon HD 3850 and 3870 products managed to gain tangible popularity among end-users and add-in-board makers, which is driving market share of ATI/AMD upwards.

Even though both leading designers of discrete graphics processors – ATI, graphics product group of Advanced Micro Devices, and Nvidia Corp. – announced relatively low pricing of their performance-mainstream graphics products, the real price of those boards is considerably higher than the manufacturer suggested retail price (MSRP). In fact, both AMD and Nvidia should be either slashing their chip prices, or working with add-in-board partners to revise reference designs.

Despite of $199 MSRP, graphics boards based on GeForce 8800 GT with 256MB of memory cost about $230 at a large U.S.-based distributor, whereas the GeForce 8800 GT with 512MB cost from $265 to $290 from the same distributor amid official price of $259. The situation with ATI Radeon HD 3850 is a little better: some stores in the U.S. sell it for $169, amid MSRP of $179, but some others may ask $200. The actual cost of ATI Radeon HD 3870, which MSRP is $219, varies greatly with the large distributor asking from $250 to $270 and some e-tailers selling for as high $280 to end-users.

Some graphics cards makers complained that while less expensive PCB will indisputably allow to make cheaper production, Nvidia itself did not want to slash the price of the GeForce 8800 GT (G92) chip itself so that to sustain the profit margins, but wanted to sacrifice margins of its partners instead. Unnamed Nvidia officials are reported to have said that GeForce 8800 GT product redesign was only a suggestion and was not compulsory.