ATI having problems with R520???

[Vapor Trail]

Interesting article here about ATI having potential problems with their new chip. Might explain the delays....


http://www.penstarsys.com/editor/company/ati/r520/index.html

[shabby]

Out of 32 pipes they're getting 16 working ones? Can you say OUCH :eek:
So much for unlocking masked pipes.

[Pandora's Box]

if ati cant get r520 out in time to compete with the comparable nvidia product they will be in deep trouble, hell just look at their stock now.

[Riptide]

Aye... This does not bode well for them. But w/that xbox contract to fall back on they'll probably be OK.

[MikeC]

From our front page. I read the Yahoo Financials everyday and had come upon this info before I saw Josh's article. From our front page;

"A number of financial institutions downgraded ATI and NVIDIA stock from "buy" to "hold" today. For NVIDIA, the downgrade is due to a seasonal slow down in sales of GPUs.
ATI, on the other hand, is being scrutinized as Goldman Sachs has expressed concern with the delay of ATI's next generation high-end graphics processor, code-named R520, which appears to be now due out in August and will miss the "spring refresh" window.

Goldman Sachs went on to say that the R520 tape-out took place as far back as October and now believes the delay is due to a design issue. The research firm is also concerned about ATI's presence in the desktop discrete market, where it sees potential share erosion.

"In addition to ATI's recent share loss at the high end which was aggravated by supply constraints, we expect that the transition to PCI Express by add-in-board makers this summer may favor Nvidia, given feedback we have received from the Taiwan channel on better reception for Nvidia's PCI Express products. While we view ATI's diversification efforts as better than Nvidia's, we think both stocks are still mainly driven by share gains and losses in the desktop discrete market, and thus any potential share loss makes us incrementally cautious on ATI."

In another report, National Bank Financial told clients that ATI has lost more share at the high-end desktop market than it anticipated as Nvidia Corp. has gained significant traction with its SLI dual graphic card product.
ATI shares dropped 5% today to $13."

[MikeC]

This is newspost from yesterday:


ATI has once again lowered sales forecasts for their fiscal third quarter and issued a worse than expected fourth-quarter outlook today, knocking its stock to a nine-month low. ATI states that a shift toward lower-end desktop and notebook computers will result in a revenue estimate of $530 million, or 5% below the low-end of the reduced guidance it gave in March.

Percent Change in Stock Price

From January 1, 2005 - June 6, 2005

http://www.nvnews.net/images/news/200506/chart.gif


However, financial analysts are claiming that NVIDIA and Intel are putting enough pricing pressure on ATI that it's starting to effect average selling prices and gross margins.

"What's happened is that they're probably losing market share in the notebook space to Intel and they're getting pummeled here in the mainstream low end [by] Nvidia," says Hans Mosesmann, analyst at Boston-based Moors & Cabot Capital Markets, a financial-services firm.

[Pandora's Box]

Goldman Sachs reiterated an "in line" rating and reduced earnings estimates on ATI Technologies (nasdaq: ATYT - news - people ), citing concerns. Goldman said, "First, we remain concerned with the delay of ATI's next generation high-end graphics processor, code-named R520, which appears to be now due out in August, flatly missing the 'spring refresh' window. Given the tape-out took place as far back as October, and Taiwan Semiconductor's yields on 90nm have been generally good on other products including the Xbox 360 graphics chip, we believe the delay is due to a design issue." The research firm is also concerned about ATI's presence in the desktop discrete market, where it sees potential share erosion. "In addition to ATI's recent share loss at the high end which was aggravated by supply constraints, we expect that the transition to PCI Express by add-in-board makers this summer may favor Nvidia (nasdaq: NVDA - news - people ), given feedback we have received from the Taiwan channel on better reception for Nvidia's PCI Express products. While we view ATI's diversification efforts as better than Nvidia's, we think both stocks are still mainly driven by share gains and losses in the desktop discrete market, and thus any potential share loss makes us incrementally cautious on ATI." Earnings estimates have now been reduced in light of these reasons and ATI's negative preannouncement. Goldman lowered the fiscal third-quarter estimate to earnings of 4 cents per share on revenue of $530 million, down from earnings of 21 cents per share on revenue of $585 million. Estimates for 2005 were lowered to EPS of 75 cents on revenue of $2.352 billion, down from earnings of $1.06 per share on revenue of $2.460 billion. The 2006 estimate was lowered to EPS of 95 cents on revenue of $2.606 billion, down from earnings of $1.31 per share on revenue of $2.670 billion. However, Goldman did raise the 2007 estimate to earnings of $1.16 per share on revenue of $2.880 billion, up from earnings of $1.10 per share on revenue of $2.503 billion due to ATI's long-term growth rate and a potential boost from the Longhorn operating system from Microsoft (nasdaq: MSFT - news - people ). The research firm said that "to become more positive on ATI we would wait for more visibility around the timing and performance of their upcoming high-end graphics processor, as the risks around its new architecture design and new process technology node (90nm) are significant."

http://www.forbes.com/markets/2005/06/07/0607automarketscan10.html?partner=yahootix&referrer=


straight from forbes

[anzak]

ATI hasn't even officially announced the chip, its not too late to knock it down to a 24 pipe part for the time being. This would give some competition to the 7800 GTX and give time for ATI to improve their yeilds of 32 pipe chips. Thats what I'd do if I were ATI.

If ATI doesn't get something out by august, its future could be very grim.

[Pandora's Box]

somehow i think its more than just the number of pipelines, i sense that ati is having problems migrating to FP32 from FP24

[vX]

this sux ...r520 looked so promising...oh well, G70 it is lol.

[Shamrock]

ATI hasn't even officially announced the chip, its not too late to knock it down to a 24 pipe part for the time being. This would give some competition to the 7800 GTX and give time for ATI to improve their yeilds of 32 pipe chips. Thats what I'd do if I were ATI.

If ATI doesn't get something out by august, its future could be very grim.


Easier said than done, they are barely pumping out 16 pipes now! they might have "some" that could make 24 pipes, as some are actually making it to 32.

[anzak]

Easier said than done, they are barely pumping out 16 pipes now! they might have "some" that could make 24 pipes, as some are actually making it to 32.

Some is better than none. The only thing that the artical said about 32 pipe chips is that one or two were shown at E3. Why let the functioning 24 pipe chips go to waste while your compeditor sells their 24 pipe chips.

[Riptide]

C'mon guys... Could one lost product cycle kill ATI? I just find that hard to believe.

[Clay]

C'mon guys... Could one lost product cycle kill ATI? I just find that hard to believe.Who said anything about ATI getting killed? As for one lost product cycle (potentially), the timing of when that product cycle was lost has a lot to do with the lasting (or not) impact it could have.

[jAkUp]

Yea well, this is starting to sound similar to what happened with the 5800 Ultra... except the other way around... heh

[anzak]

This isn't gonna kill off ATI. The only problem is that they will lose out on the enthusiast sales for at least 3rd and maybe even 4th quarter.

[SH64]

Until G70 boards appears in retail , that wont be a trouble for ATi.
besides ATi will still have some advantage by showing thier R520 later ... you know people go with the benchmarks & will always think this way : "ok the G70 is awesome ! , but first lets wait to what the R520 has to offer" .
even for a paper launch ATi can steal the show from nVIDIA if they did manage the introduce thier R520 anytime soon after the G70 intro esp if its indeed a 32-pipes product.
i dont believe that many people will just shell out for a new GeForce 7 card without seeing what ATi has to offer first.

[anzak]

i dont believe that many people will just shell out for a new GeForce 7 card without seeing what ATi has to offer first.

I do. :D

[Riptide]

Who said anything about ATI getting killed?anzak stated if they didn't have something out by August their future could be very grim.
As for one lost product cycle (potentially), the timing of when that product cycle was lost has a lot to do with the lasting (or not) impact it could have.
Do you believe that ATI will go down if R520 ends up being late?

[Clay]

anzak stated if they didn't have something out by August their future could be very grim.Right, but grim != killed/dead is all I was thinking. :) I just figured he was speaking of the short term as well.Do you believe that ATI will go down if R520 ends up being late?Depends on what you mean by "go down". Do I think stock could be affected? Yes. Do I think ATI would go the way of 3Dfx? No. It's all too early to say anything worth saying anyway. :)

[Pandora's Box]

put it this way: if nvidia can survive from the FX series fiasco ati can handle a late launch date.

btw anyone remember nvidia's stock from the FX days?

[retsam]

wow riptide were did you get that avitar from that is way cool !!

[anzak]

put it this way: if nvidia can survive from the FX series fiasco ati can handle a late launch date.

The FX series may have been bad for consumers, but it still sold like hot cakes. I swear, every time I go to best buy I see someone picking up a Geforce FX 5200. Not having a product at all is far worse than having a sucky one.

[Riptide]

Right, but grim != killed/dead is all I was thinking. :) I just figured he was speaking of the short term as well.
I had the exact opposite impression on both counts. :)
Depends on what you mean by "go down". Do I think stock could be affected? Yes. Do I think ATI would go the way of 3Dfx? No. It's all too early to say anything worth saying anyway. :)Agreed.

[Riptide]

wow riptide were did you get that avitar from that is way cool !!
Someone else was using it, I think over on ign perhaps.