ATI and The Graphics Business
HWZ : You've talked a lot about the latest X800 series and PCI Express technologies. Looking ahead, do you have intentions to further increase spending in research and any intentions to further diversify into other businesses?
Both. When you look at the PC market, it continues to be one of the key drivers in the entire semiconductor industry from the standpoint of both dollars and innovation that goes on in the industry. So, we're not going to reduce investment there at all. At some level, you have to think about the business model and investing is a function of the growth of the market. There has been some question of whether the discrete PC market and standalone AGP/PCIe is a growth market or not. Even if it's not a growth market, it's a huge market and it's probably about US$2.5 billion. So as the PC market grows with high single-digit or low double-digit growth rates, that discrete market we think will continue to grow. In terms of our growth in investment, I think you're going to see a faster growth in R&D investment in areas like DTV business, our handheld business and our integrated IGP business. Because both ATI's starting point is at a lower level versus the industry. The growth opportunities particularly for the DTV and handset, we think, [will be] a quarter magnitude in growth rates for the next few years. For DTVs, there's three million units for the North America in 2003. In 2007, I think 50 million units. So there's a huge growth opportunity and we're positioned extremely well in that segment. But you're not going to see any disinvestments in our high-end PC business.
HWZ : What about mobile graphics?
The ATI XILLEON 220 is an advanced and highly integrated system-on-chip suitable for a range of digital devices including set-top boxes, digital TVs, home media gateways, and TV-enabled webpads.
Well, the interesting thing for mobile is really kind of at a balanced point right now where ATI is doing a very effective job of leveraging with our desktop discrete graphics solutions for our notebook solutions. As our semiconductor technology advances, particularly leakage current, is becoming a real problem, whether it's 0.13µm low-k or when we look at 90nm, we're seeing five to eight times more leakage current for the device. We're going to really evaluate if we split the line at some level in order to solve the requirements of the notebook market and continue to drive the needs of the desktop market. At minimum, we're going to leverage a significant part of the development, but process technology has started to get on the edge where we might evaluate some splintering of line.
The ability to innovate with the power is one of our strong successes as well and it has benefited for example with the X800. You know it's a very high performance product and you can see the efficiency of our product with a much lower power utilization.
A lot of concepts of power play are not just software but they are both software and hardware. Those hardware solutions we integrated into the X800, we don't dynamically change the voltages like you would in a notebook but we're using significant part of those concepts in our high-end solutions. So it stands as a very effective way to minimize power. For a desktop, that is still going to be a problem. There's only so many watts in the desktop power supply despite what some people believe out there.