AMD ATI Radeon and GeForce NVIDEA graphic cards will lose clout at their respective companies now that ATI and NVIDIA are restructuring to meet
market challenges. The summer has been tough for almost all chip makers, but weakness in the Chinese market has compounded noticeable despair in North America to prompt silicon giants to adjust their business model.
Goodbye GeForce, hello Tegra
Once the lucrative mainstay of NVIDIA, the GeForce video card and other NVIDEA graphic card products will take a backseat to the more profitable Tegra mobile processor line. The system on a chip combines a CPU and a graphics card on the same die, making it a preferred solution for smartphones and tablets now on center stage.
NVIDIA boss Jen-Hsun Huang told MarketWatch that his company reinvented itself after enjoying the success of the Tegra 2 processor. Tegra 2 is a dual core unit selected by most manufacturers to power their next generation tablets that run Android 3.x Honeycomb. Google specially designed that branch of the Android operating system for use with ultra-mobile tablet devices.
As NVIDIA builds processor expertise, the company appears destined to collide with the world’s top two CPU fabricators, Intel and AMD. It will also risk losing market share in the computer industry if it slows development of its NVIDEA videocards which have recently made gains in computers made by Apple and other manufacturers.
Although NVIDIA boasts solid financials, its ability to aggressively develop its videocard products at the same time its CPUs are facing intense competition remains unknown.
AMD ATI Radeon squeezed by mobile SoC
AMD, owner of NVIDIA competitor ATI, will redirect much of its development efforts from the ATI Radeon product line into a new line of mobile CPUs for tablets that will compete with Tegra and Intel’s Sandy Bridge.
Already heavily discounting Intel’s ability to penetrate an ultra-mobile market dominated by maturing products by ARM, Samsung, Qualcomm and Motorola, analysts seem cool toward the AMD initiative that will not have a product for tablets until sometime in 2012. Intel expects to have their new tablet processor out by the end of this year.
Mobile consumers will benefit, gamers may lose
As major players in the video card market transition to reap higher profits in the tablet processor market, expect consumers to benefit in the form of access to better, faster and more powerful mobile systems.
All is not well for the technology companies, however. As CPU giants AMD and Intel move into the mobile space they will collide with established players in the mobile space such as NVIDIA. Already reeling from lackluster performance and problems with high debt, AMD could lose if it doesn’t formulate a successful plan.
Intel recently lost a court battle with NVIDIA, which could ultimately land NVIDIA graphics on Intel dies, a development that could help slam the door shut on rival AMD.
Gamers and other consumers will likely be negatively affected by these market developments as the release of new GeForce NVIDEA graphics cards and ATI Radeon cards potentially slow to a trickle.
Future uncertain
Money talks and the market talks money. If the strategy to move away from card graphics to more lucrative mobile chips, the market could begin killing off more desktop and laptop computers, leaving the world extremely dependant on emerging tablet products. .
As economic woes in the United States and Europe threaten to stymie growth in China, silicon players must plan for even more drastic survival measures if a worldwide slowdown occurs.
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