Rumors are swirling that graphics chip company NVIDIA (NASDAQ: NVDA) is planning to launch as many as three new graphics cards based on its Maxwell architecture later this month. In September, NVIDIA launched two higher-end Maxwell cards, the GTX 970 and GTX 980, which severely undercut competitor Advanced Micro Devices (NASDAQ:AMD), forcing AMD to slash prices across the board. NVIDIA's new cards are rumored to target the mid-range of the market, and depending on how aggressive NVIDIA is on pricing, AMD's lineup could be set for another major disruption.
What we know so far
The three new cards expected this month are the GTX 960, GTX 960 Ti, and GTX 965 Ti, according to the latest reports. All three will be based on the Maxwell architecture, filling out NVIDIA's lineup between the low-end GTX 750 Ti, the first Maxwell card launched nearly a year ago, and the GTX 970.
Some unofficial benchmarks, which should be taken with a grain of salt, are somewhat of a mixed bag for these new cards.
The lowest-end GTX 960 performs similarly to AMD's R9 280, which can be bought for as low as $190 today, and is only a little bit faster than the GTX 760 that it replaces. The GTX 960 Ti and GTX 965 Ti are both significantly more powerful, beating out AMD's R9 280X, a $250 model, by significant margins, with the GTX 965 Ti just a little less powerful than the $280 R9 290.
Why this matters
There are two big unknowns at this point regarding these new cards: price and energy efficiency. One of the big improvements that NVIDIA's Maxwell architecture brings to the table is greatly improved energy efficiency, so it's likely that these new cards will sip power compared to AMD's products with similar performance. The GTX 980 and GTX 970, for example, are 44% and 24% more efficient than AMD's high-end 290X, respectively, in terms of GFLOPS/Watt.
Energy efficiency is important for a few reasons. Lower power means less heat and less noise, as the fan doesn't need to work as hard to cool the graphics chip. This allows users to install more powerful graphics cards in tighter spaces, like small form-factor PCs, and for the laptop variants of these chips, it means longer battery life.
AMD has long had issues with its graphics chips running too hot. In late 2013, custom gaming PC builder Origin PC announced that it was abandoning AMD altogether. Among other things, Origin cited the tendency for AMD's graphics cards to overheat, causing major problems for its customers.
AMD will be releasing its next-generation GPUs sometime this year, with recent rumors pointing to a summer release, and energy efficiency will likely be a major focus. But AMD is playing catch-up, and this seems to be a common theme in the graphics card market over the past few years. NVIDIA has been growing its share, selling 70% of discrete graphics cards during the third quarter of this year, and the company will likely have another six months or so to win additional market share before AMD can truly challenge the Maxwell architecture.
Aggressive pricing could cause major problems for AMD
As it stands today, AMD actually offers better value to gamers in the mid-range segment, at least according to Tom's Hardware. At the high-end, NVIDIA's GTX 970 and GTX 980 reign supreme, in part thanks to NVIDIA's aggressive pricing.
NVIDIA now has the opportunity to completely upend the mid-range market with this trio of new cards in the same way the GTX 970 and GTX 980 upended the high-end market. Until it launches new models, AMD's only recourse will be to slash prices, and with their Computing and Graphics segment already losing money in recent quarters, the situation seems to be only getting worse.
Ultimately, this all depends on how aggressive NVIDIA is with pricing. But if the launch of the GTX 970 and GTX 980 is any indication, NVIDIA is likely to come out swinging later this month.
Timothy Green owns shares of Nvidia. The Motley Fool recommends Nvidia. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.