NVIDIA Takes the Lead Back From AMD

When Advanced Micro Devices (NYSE: AMD  ) announced its next-generation R9-290X graphics chip, the consensus was that it was neck and neck with NVIDIA's (NASDAQ: NVDA  ) $650 GeForce GTX 780 and could even hold up well against the green team's $1,000 GeForce GTX Titan. Now, while the extremely high-end portion of the discrete GPU market isn't the big volume/revenue driver, having the highest performing, top-of-the-line "halo" card is important in this market segment from a marketing/sentiment standpoint. While AMD seemed to have the spotlight with its R9-290X, NVIDIA's GTX 780 Ti decisively takes back the crown.

Some history
Interestingly enough, AMD was first out of the gate in early 2012 with a 28-nanometer GPU. In this market, being able to cram as many transistors into a given area and power budget is one of the key performance drivers, and being the first company to process new geometries often leads to very tangible competitive advantages. With its Radeon 7000 series cards, AMD had a head start -- if gamers wanted a high-end graphics card between January and March of 2012, it was AMD or bust. These things were flying off the shelves faster than AMD could make them (although part of that was due to TSMC's yield issues at the 28-nanometer node).

However, when NVIDIA struck back with its Kepler GPUs, built on the same 28-nanometer node, the competitive landscape was turned on its head. NVIDIA, unlike AMD, stripped out much of the non-graphics "compute"-oriented portions from its highest end consumer GPU. This meant that NVIDIA could offer the same or better gaming performance as AMD, but it could do it with a die size of 294mm^2 against AMD's 352mm^2, and at lower power levels.

While NVIDIA quickly gained share on the desktop, the notebook GPU scene was even better for the company. Thanks to NVIDIA's "Optimus" technology, which allowed notebooks to seamlessly switch between Intel integrated graphics and NVIDIA's GPUs to maximize battery life, and thanks to a more efficient GPU architecture, NVIDIA cleanly swept both the Ivy Bridge and Haswell generation of Intel notebooks.

Hawaii, NVIDIA price cuts, and GTX 780 Ti launch
After several quarters of bleeding market share, AMD began to strike back, at least in the desktop GPU segment. The company began to offer it's "never settle" bundle in which the company threw in a pile of great 3D games with each of its graphics cards. This began to reverse the share losses, and although it brought back some lost revenue, operating profit in the company's graphics division remained anemic. AMD needed more if it wanted to compete profitably. That's where Hawaii comes in.

With AMD's Hawaii family of cards (R9-290 and R9-290X), AMD stunned the world by offering excellent products at extremely competitive prices. For $399, AMD was willing to sell customers 6.2 billion transistors, and performance roughly equivalent to NVIDIA's much higher priced GTX 780. It's a gutsy move that could help to win back share, but it's probably still very difficult from an operating profit perspective.

NVIDIA, in a bid to counter this move, lowered prices on its GTX 780 and many of the cards below it. To secure the high-end crown, it launched the GTX 780 Ti, a fully enabled version of the GK110 chip that powered both the GTX 780 and the GTX Titan. Of course, the chip, unlike Titan, sees its double precision floating point performance artificially handicapped (to protect sales of the high end Tesla cards based on the same silicon), but it secured NVIDIA's leadership at the top of the gaming enthusiast heap.

Foolish bottom line
At the end of the day, NVIDIA tends to do what it takes to secure single-GPU leadership. It is interesting to note that while the Hawaii chip sports 6.2 billion transistors, the GK110 from NVIDIA comes with 7.1 billion transistors. NVIDIA is able to justify such large die sizes because the "big" GPUs (NVIDIA does two lines -- the "small" mainstream/high-end one and the "big" ultra-enthusiast/professional one) are designed to be sold primarily as workstation/HPC products for multiple times what a top-end PC gaming card will fetch.

AMD has been putting up a good fight and the game console wins help strengthen ties with game developers. But, NVIDIA wasn't going to take any threats to its leadership lightly. It's nice for NVIDIA shareholders to know that all the company had to do to regain its status as the vendor of the fastest graphics chips was to enable a block on chips that it had been shipping for a year. It will be interesting to see what the market share trends look like over the next couple of quarters.

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Comments from our Foolish Readers

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 November 20, 2013, at 12:23 PM, TEBuddy wrote:

    I realize that most people will likely be playing at 1080P, but if you are in the market for $600+ video cards you likely also have a 1600P monitor, or even an early adopter of 4K TVs. At these resolutions, if you wisely turn off AA because you DONT need it and its dumb to leave it on because of the massive pixel density, then the 290X will outperform the 780Ti.

    What would be nice, although time consuming is a review where some subjectivity comes into play and not just FPS at this setting. If wanting to play at 1600P with 60fps, tell us what it takes to get there for each card. With the 290X you likely just need to turn off AA. With the Nvidia cards likely have to cut out some more detailing.

  • Report this Comment On November 20, 2013, at 12:24 PM, TEBuddy wrote:

    And of course, if you water cool each, to remove any cooling bias, which GPU actually is better, that is the question rather than bickering about who can build a better reference card.

  • Report this Comment On November 20, 2013, at 3:59 PM, mycardbrokedown wrote:

    Oook this ashraf guy spits out another of his fanboyish bs... It has not been 2 days since I actually thought you leared a thing or two...

    What happened did NVIDIA PR have a sit-down with you and straighten you up??

    This is yet another bs article about how cool & good a flinstonian company like NVIDIA and another flinstonian company namely INTEL are... (Because Ashraf Aesra can't help it to talk about both whatever the article is actually about...)

    ". It's nice for NVIDIA shareholders to know that all the company had to do to regain its status as the vendor of the fastest graphics chips was to enable a block on chips that it had been shipping for a year" - What kind of bs is this man??

    Nvidia took the crown back by using perfectly good GK110 chips otherwise sold for 2-4K a pop castrated them and stuck them into an OC card that pushes everything, core clock and mem clocks trough the roof just to... edge out a memory starved & throttling hawaii?? Wow big cudos to NVIDIA to brute-force its place back to the top by selling a 4k chip in a 700$ package... I don't even want to know how hard these chips and the memory is binned before it gets out there... Talk about margins & operating costs - Are you kidding?? This behemoth of a chip is 30% bigger yet even fully activated and with 2ghz more on memory and round about 100mhz more on boost clock it edges out the hawaii chip?

    So let's see a revision B golden chip, overclocked, beats a 30% smaller revision A normal chip... yeeeaap I call this a win for NVIDIA...!!

    This move from nvidia is the same intel pulled a while back with the Pentium 4 extreme edition which were basically were huge xeons binned and overclocked to just match the athlon 64 ?

    I wonder... do you still believe that AMD and Intel are the only x86 licence holders in the market?? Who's the third?

    No wonder NVIDIA and INTEL or shareholders of these 2, or AMD shorts employ superficial, misinformed pseudo journalists with no spine like the case here... because nobody in their right mind would be as fanboyish as this guy with so much stamina to churn out 2-3 articles a week lauding either Intel or Nvidia or smashing AMD or all of the above combined...

    For the (happy) investors:

    - HSA Foundation members are Samsung, Qualcomm & Oracle

    - Quantcast & AMD have both announced the first HSA enabled chips (one with ARM one with x68) both slated for the end of the year.

    - Apple builds its Mac Pros (the pinacle of apple desktops) with not 1 but 2 AMD Fire Pro cards not Quadro not Tesla...

    - Both XBOX one and PS4 use AMD custom APUs (Nintendo uses just an AMD gpu)

    - Verizon has started building it's entire clowd with Intel chips... After AMD bought Seamicro Verizon now switched to AMD even though AMD still offers and will continue to offer seamicro builts with both intel and amd chips.

    - Oracle will launch Java 8 & 9 with HSA support meaning both ARM and AMD chips will have much improved java execution over intel (most (medium-big)enterprize level applications are java run)

    - Oracle is mainly a DB vendor but not only - they will leverage the APU and the java improvement in their DB meaning they will be able to make much faster index seeks by using the GPU. When they do Intel will be left in the dust as it has absolutely NO tech that can do that!

    - Cloud services providers don't need big iron servers(read: intel) They need armies/legions of small chips(read apus,atoms, arms)

    - Amd is taping out 20 & 14 nm this & next quarter. With intel delaying further and further 14nm AMD is now half a node behind intel with 28nm and if plans hold by 2015 both companies will be on 14nm.

    - AMD has a 2W part that will go in fanless builts.

    - AMDs flagship GPU is 30% smaller (read more chips / wafer - where fabs charge per wafer not working chips!) then NVIDIAs flagship by being only marginally slower (with reference cooler, slow memory and all)

    - Almost ALL bit gaming names are in AMDs packages... Nvidia has only... Ubisoft...(Yeah I know, right?... french...)

    Makes you wonder, are all companies in the HSA Foundation and not only gone completely MAD for buying chips from a dying company(as portrayed in all articles buy this ahsraf aesra character)? How does this fit with most companies *needing* long term commitments, did AMD bribe these companies? With what money?? If this is just wishful thinking why the hell does the entire industry except Nvidia and Intel jump aboard?

    - these are all FACTS you can and SHOULD check before you gulp up bs like this article.

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