ATi 2006: Don't Call it a Comeback...

ATi 2006: Don't call it a Comeback...Perhaps not a very good title, only fans of L.L. Cool J would understand the significance.

I recently wrote an article and conducted an interview for CPU Magazine on ATi. You'll see it in the March 2006 issue which subscribers already have. Generally speaking, we have been incredibly impressed with ATi lately - and they deserve some recognition for listening to their customers and making swift changes without crying about it.

Here is a snippet of the article:
2005 was a bittersweet year for ATI. The company realized success with their mobile phone business and continued to do well in the areas of integrated and notebook graphics. Microsoft and Nintendo selected ATI to provide graphics hardware for Xbox 360 and Revolution, respectively.

We also learned that Intel would discontinue using their own integrated graphics in some of their lower-end boards and would instead use ATI chips for these platforms. Of course, some of these successes wouldn’t be fully realized until early 2006, but in several areas the company certainly seemed to be making headway.

On the desktop PC side it was a completely different story. I bet money that ATI wouldn’t meet their targets, but I certainly didn’t expect them to be a year late to the party. Crossfire should have been a very successful launch, but the company executed the launch poorly by releasing products in multiple stages, and with disappointing results.

It seemed ATI couldn’t launch a product on time in 2005 no matter how hard they tried.

(...but don't worry the article gets better)
Here is a link to the rest of the article online.

In the article I mentioned a link to my blog for the actual interview questions.

Toshiyuki Okumura as been at ATi for years. He is absolutely one of the hardest working and loyal people I know - and as a result, he is highly respected in the channel. Even when ATi was getting the boots from people in the channel and the media, Toshi kept his composure. He remains as one of the more respected people in the firm both internally and externally.

Toshi was recently promoted to a director position at ATi, his official title is "Director, Channel Marketing and Business Development". His promotion couldn't have come at a better time, he is certainly deserving of the position.

As promised here are the interview questions:

1) What did ATi do right in 2005?
[Toshiyuki Okumura] We did many things right in 2005. Some highlights are delivering XBox 360 chip to MS, completing a successful transition to 90nm technology for all of our new chips (X1K family), launching and shipping 3 brand new architectures on 90nm, and we are the graphics chip of choice for the Motorola RAZR phone -- which is the best selling phone for Motorola . We are also the graphics chip of choice for the LG SV360 which was the world’s first mobile phone with true 3D gaming capabilities, we maintained #1 market share position in DTV and last but not least, ramped our chipset business, growing it by almost 200% year-over-year. Obviously there are more things we did right. If you need more, please let me know.

2) What did ATi do wrong in 2005?
[Toshiyuki Okumura] We had some challenges in 2005. We introduced dozens of new products and a few of them were slower ramping than we would have hoped. One of our biggest challenges on the desktop side was the delay in delivering the R520. We had some technical issues that took much longer then expected to resolve. Due to the issues, we were later to market then anticipated. Launching of CROSSFIRE was also a challenge in 2005. However, we have overcome many of the issues and now have an amazing platform for multi-GPU products. The CROSSFIRE technology is in many ways superior to our competition’s solution. We’ve discussed the highlights of CROSSFIRE so no need to go on further here. But we learned a lot in 2005 and have been able to put a lot of processes in place to ensure better delivery in 2006.

3) What can we expect to see in 2006 from ATi on the desktop space?
[Toshiyuki Okumura] In 2006 you will see a lot of great things from ATI: Continued leadership top to bottom starting with the introduction of the X1K family in 2005 and the upcoming X1900 family. X1900XTX will be the fastest, most feature rich product available in the market. You will also see ATI deliver to our commitment in 2006. No more launches without product availability. You will see the proof of this with the X1900 family launch.

You will also see proliferation of CROSSFIRE as a technology platform. We now have Tier 1 Motherboard vendors committed to the CROSSFIRE Chipsets not to mention our support of the Intel i955 and i975 chipsets. Another inflection point will be the introduction of VISTA OS. MS endorsed ATI at CES on our readiness for VISTA TODAY. We also anticipate that the introduction of VISTA will also increase the TAM for discrete graphics products.

You will also see ATI take leadership in the transition to newer FAB processes like 80nm in 2006. Last but not least, you will see ATI launch new and innovative products into the market in 2006 which we can not discuss here today.

4) What happened to Axiom, and what are ATi's plans on the notebook arena for 2006?
[Toshiyuki Okumura] ATI’s strategy for graphics modules is to provide flexibility and the best support for customers. Our Axiom spec is actually a design kit that provides support for multiple module interfaces (including the MXM and our own JAE connector, as well as a vendor’s proprietary design), and also focuses on general design and layout rules to ensure a customer’s design is being optimized for best performance, lowest power and maximum flexibility. The market today for modules is a mix of multiple module designs and we have found that many customers prefer to continue to design their own proprietary spec. ATI is agnostic in terms of the module being used as we sell the ASIC – the board it is put on is not as important provided the design is robust.

In 2006 we will continue to bring the most advanced technologies to the notebook platform. We have demonstrated our expertise in the area of power management, something that will become increasingly important as we push the envelope in terms of the graphics and gaming capabilities in mobile platforms.

5) What are your thoughts about Nvidia's Quad SLI? How will you compete?
[Toshiyuki Okumura] We believe that the QUAD SLI today is like a “Concept Car”. It’s neat but likely not going to be on your driveway any time soon. The solution just is not practical. Having said that, ATI’s graphics chips have had the capability to string together multiple chips together in a system since the R300. In the Workstation/Flight Sim market, we have partners that ship Quad ASICs on a card x 4 cards in a system = 16 ASICs in a system. We have capabilities to ship many more ASICs into a single system – max is 256 ASICs.

6) How are ATi's other business units doing, including mobile and console?
[Toshiyuki Okumura] In the handheld area, we began shipping in several new Motorola platforms this past year including the Motorola RAZR V3i, the PEBL, the SLVR, and the ROKR. In some of these design wins, we're now shipping on our third generation of multimedia MPUs, which include megapixel cameras, camcorder functionality, and video encode and decode. We are also shipping in leading-edge phones from some of the top-handheld manufacturers in the industry.

Our DTV business is setting records with both our Xilleon and theater lines or products. Our customers continue to see the value of Xilleon which delivers the best analog digital reception, exceptional image processing technology, and the most versatile and robust software stack in the industry. ATI is also enabling high-quality DTV for the masses, with the most advanced, cost-effective integrated solution, the Xilleon X240. And recently we shipped our 10 millionth chip for integrated HDTVs. And in the console segment, we have been busy as well.

The Xbox 360 launched on November 22nd of last year and the demand has been overwhelming. It was the first to market advantage, Microsoft estimates 2 to 3 million units will ship in the first 90 days, and 4 to 5 million units in the first six months. We have been busy with Nintendo as well, stay tuned for information on that front.

7) I have reason to believe 2006 is a turnaround year for ATi, am I crazy?
[Toshiyuki Okumura] You are not crazy. We have the best product line up in DT, mobile and Chipset this year on the PC side. DTV is growing at a tremendous rate as the consumer transitions to HDTV. We will maintain our leadership position in this segment. We have very cool stuff coming out through the handheld group soon. Stay tuned. We are also diversifying our portfolio with penetration into embedded products like arcade games, medical imaging and video slot machines to name a few. It is going to be a great year and we are very excited.