ATI Interview - Matt Skyner
Before and after the Radeon X850 XT Platinum Edition launch, we talked to ATI on a number of internal levels about their product availability. Our core enthusiast readership was clamouring to purchase high-end X800 at general retail, X700 XT was no longer an official SKU, and all reports seemed to indicate that either Dell and other large customers of ATI were buying up everything in sight, or that ATI were having trouble getting the correct number of orders in to TSMC for parts, underestimating demand.So to see if ATI had any insight into what was happening in real terms, I compiled a list of questions for ATI and they were duly fired off. ATI's Director of Discrete Desktop Graphics, Matt Skyner, was gracious enough to take the time to reply. Here's what he had to say.
How many X800XT and X800XT PE cards have been sold world-wide, to OEMs or otherwise?
While we don't give out product shipment information in such granular terms, I can say that ATI has shipped tens of thousands of RADEON X800 XT PEs and hundreds of thousands of the whole RADEON X800 family since it was launched. On the PCI Express side most of the products have gone to OEMs and system integrators because the upgrade market for PCI Express is very small at the moment. On the AGP side ATI is shipping product to OEMs, system integrators, board partners and to the retail/e-tail channel. However, we recognize that demand is exceeding supply in some channels and we are taking steps to resolve that.
What's the proportion of X800 XT and X800 XT PE cards sold to your major OEM customers for bundling with full systems, relative to the number of cards released for single retail sale online and in stores?
Sales of cards 'within a system' always exceed retail channel sales. This is especially true with a major industry transition such as PCI-Express. ATI's lead in this crucial market has been a major influence on our overall performance in 2004 and we expect this to continue through 2005. ATI was on the original steering committee for PCI-Express and we produced the world's first native solution well over a year ago.
That technological lead has been great for us - and our customers. It is difficult for us to say definitively how much of our product is sold in systems versus retail because a good portion of our sales go through our add-in-card partners and we have less visibility on the final destination or sales channel of our partner's products. In general the retail upgrade market is about 10% of the total market. On the PCI Express side the retail upgrade market is currently lower.
In your opinion is there any substance to the suggestion that just days before X850 XT PE was announced, Dell (or indeed any other of your large customers) dumped unsold X800 XT and X800 XT PE stock back to the market - stock that they'd been holding on to as a priority customer, and never sold; cards that could have been in the hands of enthusiasts desperate to pick one up?
No, there is no substance to that suggestion.
Are ATI having production issues with high-end R420, R423 and now R360, causing world-wide shortages of those GPUs? There seems to be an incredible shortage of at least high-end R420 and your customers would like to know the reasons why.
It is fair to say that we have been continually surprised by just how many people want ATI graphics products. Our revenue has increased by almost 100% in the past couple of years and we posted $2B for fiscal 2004. We have also seen huge market share increases. Mercury Research's last quarterly report showed ATI with 55% of the desktop standalone market, up almost 45% from the previous quarter. By all measures, that is a lot of product. With the introduction of our new products (RADEON X800 XL, RADEON X800 and the new RADEON X850s) we have made steps that we feel will increase the availability of product. We are also thoroughly assessing our production schedules for 2005/6 and we will be doing everything we can to ensure better supply in the future.
ATI push their now-famous yearly revenue figure of $2BN, when asked about how well they're doing in the high-end space. Just exactly how much of that revenue is really high-end board sales?
The enthusiast segment represents a relatively small part of our PC product sales. However, having a successful "king-of-the-hill" product does influence sales the mainstream and value segments. At the same time, ATI is leveraging its graphics expertise and strengthening its presence in other markets like mobile phones. Our IMAGEON graphics chips provide graphics acceleration for mobile phones from some of the best mobile phone handset manufacturers in the industry. Motorola has just announced a complete range of products powered by ATI. The same model is probably true for other markets. For example, a world class car company might win Formula One World Championships - which give it great product recognition and branding - but actually generate far more revenue from the sale of products like transport vehicles. It is an irony that the products that get the lion's share of the limelight are not usually the ones that over 200 million people are using in their everyday lives.
Why the dual-slot cooler this time around, given that R480 is a thermally optimised version of R423 and the increase in clocks from X800 XT PE to X850 XT PE is relatively small (less than 4% of the older total clock) ?
We designed the RADEON X850 to deliver the best overall performance and stability possible. Part of that design includes the dual-slot cooling solution. We think it will be of great interest to enthusiasts, because not only does it cool the graphics chip effectively and quietly, but the design also cools the overall system by venting warm air from the case.
Is it due to Dell finally accepting dual-slot cooler designs from IHVs, for inclusion in their XPS range?
No.
Can ATI confirm or deny the rumours that RIALTO, your bridge chip to bring PCI Express native GPUs to AGP, simply isn't working correctly yet? If it does work, why aren't you using it to push X700 into the AGP mid-range? If it doesn't work, or is delayed for whatever reason, can ATI see the frustrations of its AGP-using customers in not having X700 to purchase?
We don't talk about unannounced product, nor do we comment on rumours. However, we will have more AGP products to add to our product family very soon.
Will X850 ever make it to AGP using RIALTO and R480, or a rumoured R481? Forget that ATi don't comment on unannounced or roadmap product, your AGP customers are keen to hear what's going in the high-end space, given that there very few X800 XT or X800 XT PEs in retail.
You can place orders now for both the X800 XT and X800 XT Platinum Edition and many distributors have them in stock. We will consider making AGP versions of more of our products very soon for those customers wishing to upgrade existing AGP platforms. Which processors are offered will depend on the demand in the market at that time.I want to say how much we appreciated HEXUS taking the time to compile this list of questions on behalf of their readers and giving us the opportunity to respond!
Matt Skyner
Director
Discrete Desktop Graphics
ATI Technologies Inc
Matt's answers to our questions basically tell you two things. Firstly, ATI are constantly battling to balance demand against concrete orders at their foundry partners, in order to get the right number of products to market. They're not a company keen to have large amounts of ASIC inventory sitting unsold outside of retail channels so it's a constant challenge for them to get it right. Referencing The Tech Report's recent CES 2005 report, you can see Scott asked them a related question to which they replied that calculating orders based on demand has hurt them in the past. It's hurting them now too, but it's something they're dedicated to fixing in the future. Given recent noise made about R430 and R480 general availability, they're making some headway.
There's also some truth to notion that ATI have purposely not gone after the same end-user presence in terms of cards in stock at popular e-tailers as NVIDIA have (you'll generally see more GeForce 6-series products on the web than Radeon X8 and X7-series). It's a curious tactic when using popular online press to push products so heavily, but it seems that ATI might change tack slightly in the future, in that respect.
Secondly, they're shifting some focus back to AGP. Matt's response to the question regarding RIALTO, along with speculation at Beyond3D, shows that we can say with conviction that ASICs are on the way for certain X800, X700 and X850 products on AGP, without RIALTO. RIALTO remains a curiousity, ATI sticking with augmenting bus interfaces at that tape-out and respin cost at their foundry partners, rather than persue a bridge chip they think their board partners wouldn't buy. That suggests that RIALTO, if it were to appear, would be an expensive bit of silicon, relatively speaking.
I'd like to personally thank Matt for his time and effort in answering my questions, my managing editors for their help and our readers for pressing me to ask ATI just what's up. It looks like ATI have got the foundry time they need to help get things back on track outside of OEM, or they'll switch existing allocation over if possible. Look out for those products soon.
