It is essentially a toolset for rendering individual strands of hair, as expected
The TressFX technology revealed yesterday immediately made people think that Advanced Micro Devices had found a new way to render hair.It turns out that this is precisely the case: the company co-developed it with Crystal Dynamics.
It is a special toolset that uses DirectCompute to unlock the full number processing (parallel processing) power of the Graphics CoreNext GPU architecture to render individual strands of hair.
AMD's work on Order Independent Transparency (OIT) and Per-Pixel Linked-List (PPLL) data structures were used as a basis.
Nevertheless, DirectCompute is the most important here, as it is the one processing the physics of these strands of hair, and how they are affected by character motion, wind, water/rain, etc.
The first game to use tressFX will be the next installment of the Lara Croft: Tomb Raider franchise.