Huang Jen-hsun (
So when Huang, the chief executive of Nvidia, was planning a new Silicon Valley headquarters for his company, the maker of the chips that display high-quality images on computer screens, he insisted that his architect connect all four of the three-story buildings of the campus by second-floor skybridges to make sure that employees would not have to wait for elevators.
One of the reasons Huang is in such a hurry these days is because Nvidia is being chased far more aggressively than ever before by its nearest competitor, ATI Technologies, based in a suburb of Toronto.
In hopes of recapturing the clear advantage it let slip, Nvidia is counting on a new generation of its GeForce chips that it was to introducing yesterday to make a big splash in the market.
Until last year Nvidia was the overwhelming leader in making the chips that are used to improve the ability of personal computers to portray complex three-dimensional and fast-moving graphics images, a quality particularly prized by video-game players. Moreover, it had an exclusive deal with Microsoft for the graphics processing chips used in the Xbox game machine.
That all came undone last year when Nvidia placed an ill-timed bet on a new generation of chip-making technology that ended up reaching the market too late. At the same time, Nvidia lost its Xbox contract to rival ATI when it refused to meet Microsoft's stringent pricing demands.
As a result, after growing at about 100 percent annually for four years, Nvidia's revenue fell from US$1.91 billion in 2002 to US$1.82 billion last year.
Stiff competition
"ATI not only outperformed Nvidia, they had a cheaper chip," said David Wu, an analyst at Wedbush Morgan Securities who follows the graphics chip market.
Shares of Nvidia fell from a high of US$71.71 in January 2002 to as low as US$7.37 in October 2002. They have since climbed back to about US$26 a share. (The stock closed on Tuesday at US$25.63.)
It was a grim lesson for Huang, who cofounded Nvidia in 1993 with two colleagues from Sun Microsystems. At the time there were no 3D games in the PC market and no one was attempting to use texture mapping, a technique for wrapping a digital image around an object to give it a more realistic appearance.
Now, with the rush to display high-quality digital images on everything from computer screens to cellphones, and the introduction of a new generation of widescreen digital televisions, most experts expect to see a new boom in graphics chips.
David Orton, a veteran Silicon Valley technologist who is president of ATI, said: "Look for new performance from us. We both want to grow the market through advances in 3D."
Those advances are increasingly putting the makers of graphics chips at the heart of computing, demanding even more complex circuitry than that used in the central processing units that run all the basic operations of a PC. Intel, which dominates the market for central processing units, includes less advanced graphic capabilities in its Pentium chips.
Indeed, both Nvidia's new GeForce 6 family and ATI's new product that will reportedly be named Radeon X800 -- which the company says will be announced soon and should be in the stores roughly at the same time as Nvidia's -- will have more than twice as many logic transistors as the current state-of-the-art Pentium chips.
"When you look at the computer, you look at the screen," said Jon Peddie, who runs a computer industry consulting firm in Tiburon, Calif. "Guess who owns the screen? The graphics processor."
Lucrative market
The chips made by Nvidia, which is based in Santa Clara, and ATI compete primarily for the high-end gaming market, where consumers pay between US$300 and US$500 for add-in cards that yield accelerated graphics.
Beyond the PC, the new generation of graphics chips are expected to help push advances in everything from the way Hollywood films are made to the use of digital images in medical diagnostics.
Huang said he is particularly intrigued by the idea of using the Internet to shift processing to powerful centralized computers.
"What about the possibility of rendering the entire earth in 3D?" Huang mused. "The rendering would take place on the server but it might show up on your cellphone."
For now, Hollywood is the clearest new target market. Next week, at the National Association of Broadcasters convention in Las Vegas, Nvidia plans to announce a new software tool called Gelato that is intended to make it possible for animation studios to take advantage of inexpensive PC hardware to speed up the creation of digital movies.
"We're taking a huge step in the direction of cinematography," Huang said. "We are not that far away from being able to do Finding Nemo in real time."
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