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Nvidia Puts Pressure On Partners to Keep Low Costs

Raw material savings would allow the company to compete with AMD's video cards

By Bogdan Botezatu, Hardware Editor

28th of December 2007, 15:09 GMT

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The PCB board makes the difference between a GeForce 8800GT and a Radeon HD 3800

Nvidia has put a lot of pressure on its business partners recently, and strongly asked them to reduce the number of PCB board layers they use for the GeForce 8800 GT-based graphics cards. Currently

, a GeForce 8800GT PCB board counts ten layers, and Nvidia is determined to reduce them to only six. This move is aimed at reducing the manufacturing costs for the 8800 GT series.

PCB boards are produced by Taiwan-based Aurora Industries, using phenolic resins laminates. This month only, the cost of phenol raised 4%, which forced the company to set new prices for its PCB products. Moreover, the price of phenol has rose some 50% since 2006 to US$1,415 per metric ton in February this year, and this affects both motherboard and video card manufacturers.

Nvidia's plan of redesigning the PCB boards would allow the company to keep up with AMD's Radeon 3800 graphics cards. The HD 3800 family has been launched about three weeks after the GeForce 8800 GT, but the interest in AMD's Radeon HD 3800 video cards has rapidly grown.

Not long ago, Nvidia took the lion's share in the video sector, with a generous 90 percent of the market, while AMD would only take the rest of 10 percent. The HD 3800 graphics adapters allowed AMD to pick up, and the market shares of the companies have been set to 70% and 30%, respectively.

Nvidia expects savings of about $10 per unit by cutting the PCB layers from ten to six, and the move would allow it to stay in the game. However, Nvidia's business partners are somehow displeased with the suggestion, since the company would rather improve the price/performance ratio while keeping the same profits.

Company officials said that Nvidia has only suggested its partners reduce manufacturing costs, as it believes that it's the best move to stay on the market. The manufacturers will not be imposed to make the move should they disagree.

TAGS:

NVidia | AMD | GeForce 8800 GT | Radeon HD 3800

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