Who's the King of the Graphics Mountain?

You know all about the never-ending duel Intel (Nasdaq: INTC  ) and Advanced Micro Devices (NYSE: AMD  ) are fighting in the general processor arena. Every time AMD comes up with a game-changing new CPU like the old Athlon 64, Intel puts its foot down and jumps ahead again with innovation of its own. Sometimes the roles are reversed. Lather, rinse, repeat ad infinitum.

AMD fights a similar battle against graphics specialist NVIDIA (Nasdaq: NVDA  ) to establish supremacy and profitability in the market for computer graphics processors (GPUs). The consumer-centric end of that rivalry is well-documented. But did you ever stop to think about the extreme high-end graphics war? According to NVIDIA CEO Jen-Hsun Huang, that market should quintuple to about $5 billion annually in the next few years.

In that space, AMD's ATI unit just released a matched pair of supercomputers-on-a-card that aim straight at the heart of Hollywood. The ATI FirePro V8750 GPU comes with a hefty $1,800 price tag -- but also with a staggering 800 processing units, or "shaders" in the lingo. The FirePro can feed its display output through the new S400 Synchronization Module to ensure broadcast-quality video signals under any kind of processing duress.

Because GPU chips are more specialized than a plain old CPU, they are capable of staggering feats of high-performance computing under the right circumstances. A single workstation with four of these cards rivals the finest big-iron servers you'll find at IBM (NYSE: IBM  ) or Hewlett-Packard (NYSE: HPQ  ) when it comes to rendering cinematic special effects or certain scientific computing workloads.

NVIDIA has long been the top dog in this lucrative market, thanks to its top-notch Quadro processors. Today's new releases look like an entirely new direction in AMD's graphics strategy, asking NVIDIA to dance or die. Sure, you could buy workstations from Dell (Nasdaq: DELL  ) , Lenovo, or HP with older versions of the FirePro card, but the Quadro has been their weapon of choice. This sub-sector is heating up.

And if today's action wasn't hot enough for you, keep an eye out for Intel's Larrabee GPU chips next year. Intel hasn't been a force in high-performance graphics hardware since the early 1990s, but that should change with Larrabee. DreamWorks Animation (Nasdaq: DWA  ) CEO Jeffrey Katzenberg waxes poetic over the product, saying that "Larrabee raises the bar of what we can do not just by 2X or 3X but by 20X."

Your move, NVIDIA. Can you match either one of your new and upcoming ultra-exclusive rivals?

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DreamWorks Animation SKG and NVIDIA are Motley Fool Stock Advisor picks. Dell and Intel are Motley Fool Inside Value picks. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in AMD, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 31, 2009, at 11:20 AM, TEBuddy wrote:

    Dreamworks is dreaming if they think Intel will come out with something better than AMD. AMD would have been the better choice to continue their computing relationship with.

    Intel and Nvidia steal AMD talent to make their products better. AMD is going to come out king of the graphics processing for the next few years.

    Intel is capable, but will be playing catch up to both Nvidia and AMD for the next many years. Although Intel having graphics cards is wonderful for them, so all of their PCs and Laptops can have Intel graphics instead of the performance cards from the rivals. It will raise Intel's margins greatly in the budget and mid performance computers.

  • Report this Comment On August 02, 2009, at 7:51 AM, asH95 wrote:

    you guys spent to much time looking the wrong way.

    Intel marketing officer Sean Maloney in an interview 7/30

    But Maloney wants companies to upgrade their PCs to run Windows 7. "Now the question is," he said, "can we get the argument to the CFOs and the CEOs that it makes more sense to spend a little bit on capital to reduce your operating costs?"

    What Maloney really meant:

    Yo Ballmer, if I get CFO's and CEO's to spend on Windows 7 , and (discounted) Intel boxes from our partner retailers (cha-ching).....then you guys ditch AMD

    Ballmer’s reply 7/31

    "When a customer says we want a netbook with bigger screen we will say here's an ultra thin," Ballmer said. "We want people to be able to get the advantages of light weight performance and be able to spend more money with us and Intel and Dell and HP and others."

    What Ballmer really meant:

    We hear you loud and clear Intel...AMD who!

    Intel may be able to persuade corporate’s to upgrade (they recently discounted their chips-coincidence?); time will tell. But it is going to be AMD who sparks the life with consumers- a win win for Microsoft. Meanwhile AMD is told to takes a back seat..They are the real technology in this –I believe- new revolution...check it out...and as for Larabee, it’s Intel’s answer to AMD’s Shrike chip ( CPU+GPU) -Fusion . realize; Intels approach is totally different than AMD due to Intel’s lack of experience (Wow) in graphics.

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