Fresh off its acquisition of Trident Microsystems Inc.'s PC graphics division, Taiwan start-up eXtreme Graphics Innovation (XGI) is expected to field two lines of processors in the fall that will inaugurate its pursuit of the mainstream and high-end markets.
Next month, XGI will launch a desktop PC graphics chip that company president Chris Lin promises will be a "totally new architecture" with significant improvements over the Xabre line of chips developed by its parent, chipset maker Silicon Integrated Systems Corp. (SiS). Soon after, XGI will roll out the next generation of Trident's notebook graphics chip.
The launch will mark the beginning of a major brand-building campaign for XGI chips, something that SiS failed to do with the Xabre line. XGI executives said that as an independent company, its mission is to focus more on discrete processors instead of also having to consider the constraints of a core that must go into one of SiS' low-cost integrated chipsets.
For the past few months, XGI has been coordinating the work of two graphics teams, one from Trident, the other from SiS. The company plans to maintain separate cores from each team through the fall, but Lin said that by the end of the year, XGI will unify the architectures and use process technology and feature sets to address different market segments.
Right out of the gate, however, XGI will run headlong into the graphics market leaders, ATI Technolgies Inc. and Nvidia Corp. A key difference between the SiS and XGI strategies is that SiS targeted Xabre at entry-level and low-end mainstream add-in cards, trying to leverage a low-cost structure to slowly build market share.
But XGI has its sights set on the mainstream and high-end markets, believing that it has both the lower cost structure and expertise to field a chip
that can challenge the midrange and high-performance processors of ATI and Nvidia. XGI said it will also try in the near future to challenge the two companies' top-of-the-line products.
"For a graphics vendor, if you just totally focus on the entry-level it's not easy to build your brand name," Lin said. "So in order to get back to being a real graphics vendor for discrete parts, we need to offer a full product line, including high-end, mainstream, and entry-level."
Building a brand name, however, will not be easy, and few companies in Taiwan have done it effectively. Lin believes that XGI will establish its brand, pure and simple, by delivering performance. In fact, to win over graphics card vendors, the company will have to deliver performance at the right--that is, lower--price, according to industry observers.
Lin acknowledges this point, especially given the fact that XGI will be facing North America's resource-rich ATI and Nvidia. Still, he notes that gross margins in the graphics business are shrinking and, like many Taiwanese companies, he sees opportunity in a maturing market. "Cost structure is very important, so a team in Taiwan should be more competitive," he said.
XGI will likely also gain favorable wafer pricing from one of its major investors, Taiwan foundry United Microelectronics Corp.
At the moment, XGI is tight-lipped about the performance specifications of its desktop graphics chip series, code-named XG40, XG41, and XG42. The company will launch the chips in September, and is holding back the details until then.
The notebook processors will be based on Trident's XP4 core, which has been used in PCs from Toshiba Corp. and Fujitsu Ltd. as well as ODMs from Taiwan. Dubbed the XP5, the chip's core speed will be 200 to 230MHz, with a 128-bit memory interface to either 32, 64, or 128Mbytes of 250MHz DDR. The processor, which supports Microsoft 's DirectX 8.1, is scheduled for production in the fourth quarter on UMC's 0.13-micron process.
Next year, XGI is expected to aggressively expand its engineering team. Now at about 250 people, Lin said he wants to increase that by at least 50%. "As I noted, we are serious about this market," he said.