ATI/Nvidia price war takes its toll, Intel seen as savior

jmke · 4th June 2008, 15:56

The CEO of one of the largest manufacturers told us that he happily would ditch AMD and Nvidia completely and go for Larrabee alone since he would be able to secure his company’s future with Intel's design policy.

The apparent problem is a cutthroat price war between Nvidia and ATI pushing add-in-board (AIB) companies into a margin of 2% or less. Most of companies are even believed to lose money with every card you buy, since some ATI and Nvidia parts have a negative margin.

Why negative? Because both AMD and Nvidia push partners to keep the prices as low as possible, and in a lot of cases this means there is no money left for research and development. In the end, AIB vendors may be forced to buy boards from ATI and Nvidia. The result may be that a company is caught in a downward spiral. According to our sources in Taiwan, two current graphics card manufacturers may actually be on the verge of bankruptcy because of this policy.

http://www.tgdaily.com/content/view/37779/118/

4th June 2008, 19:40

Pretty much the same thing we've seen with mainboard vendors I guess, although the latter being slightly more complicated.

4th June 2008, 15:56	#1
jmke Madshrimp Join Date: May 2002 Location: 7090/Belgium Posts: 79,022	ATI/Nvidia price war takes its toll, Intel seen as savior The CEO of one of the largest manufacturers told us that he happily would ditch AMD and Nvidia completely and go for Larrabee alone since he would be able to secure his company’s future with Intel's design policy. The apparent problem is a cutthroat price war between Nvidia and ATI pushing add-in-board (AIB) companies into a margin of 2% or less. Most of companies are even believed to lose money with every card you buy, since some ATI and Nvidia parts have a negative margin. Why negative? Because both AMD and Nvidia push partners to keep the prices as low as possible, and in a lot of cases this means there is no money left for research and development. In the end, AIB vendors may be forced to buy boards from ATI and Nvidia. The result may be that a company is caught in a downward spiral. According to our sources in Taiwan, two current graphics card manufacturers may actually be on the verge of bankruptcy because of this policy. http://www.tgdaily.com/content/view/37779/118/ __________________

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4th June 2008, 19:40	#2
Wolf2000me Posts: n/a	Pretty much the same thing we've seen with mainboard vendors I guess, although the latter being slightly more complicated.