SAN MATEO, Calif. STMicroelectronics will take another crack at the mainstream graphics chip market, and plans to release the first in a new family of devices next month. The company will aim its graphics chips at the desktop PC segment, and also hopes to leverage its strong presence in the set-top box market, which is beginning to use more graphics technology. But the company faces significant barriers in a cutthroat market that has lately seen more company exits than entrances.
"The graphics market can be extremely rewarding to the leaders, and punishing to the also-rans. It is not our intention to be in the latter category," said Tim Chambers, vice president and general manager of ST's graphics products division in Carrollton, Texas. "We understand the environment we are entering, and we have no fear."
Chambers said ST will launch the first in a planned family of devices in April, aimed at the mainstream desktop PC space. A second chip aimed at the set-top box market will follow in the summer. Initially, the PC version of the chip will target both system companies and add-in card vendors, Chambers said. ST hopes to eventually establish its brand name in order to pursue retail sales of add-in cards under the ST logo. The chip family does not yet have any official name.
The competitive PC graphics market demands both high performance and low prices, with memory components representing one of the highest cost items in most graphics card, Chambers said. ST plans to bring out a device that uses memory bandwidth more effectively than current cards, which will help limit costs, Chambers said.
"As memories on the graphics cards get larger, they tend to dominate the system cost," he said. "What you need is faster memories, broader bandwidth and a higher-speed clock interface."
The ST device will be extremely fast, Chambers said, and internal benchmarks on prototypes of the chip show that it delivers more performance than Nvidia Corp.'s GeForce 256, currently considered one of the fastest graphics chips on the market. Chambers promised that ST's chip will be priced slightly under the GeForce product.
ST's earlier entry into the PC graphics market came through a relationship with Nvidia (Santa Clara, Calif.), whose early products were manufactured by ST. Chambers said ST still supports customers who use those products, and said the Nvidia relationship has garnered more than $100 million in total revenues for ST, although the company's current revenues from those products are fairly slim.
ST's new graphics device will be based on technology obtained through an alliance with VideoLogic Systems, a division of Imagination Technologies Group plc. "We wanted to use the best architecture going forward," said Chambers, "and the products from Imagination are very forward looking."
ST is not currently a major player in the PC graphics market, but does supply a high volume of chips to the set-top market. While those boxes do not currently demand much graphics performance, their role in the consumer space is expanding and the market is growing. Chambers said ST hopes to leverage its presence there in order to grow its sales of graphics devices as the market begins to demand more graphics technology in set-top boxes.
However, Peter Glaskowsky, graphics analyst for MicroDesign Resources (Sunnyvale, Calif.), said the company faces significant hurdles in both end markets. "To become a major player in the graphics market, you have to find something that you can do better than anyone already in the market, and there aren't many remaining niches," he said. "There are a whole lot of good reasons not to go into that space, and I would advise against it."
Glaskowsky observed that ST hopes to become a presence in a cutting-edge space using technology it has obtained from another company, VideoLogic, which could make it more difficult for ST to compete against companies with in-house design expertise. "To be serious in this market you really have to have your own engineers," he said.
The company's two-pronged marketing approach could allow ST to diversify in two segments, but neither market will be easy to crack. While the PC space is notoriously competitive, with current vendors skating on razor-thin margins, the set-top box market may not emerge as a significant source of graphics revenue.
Glaskowsky agreed that set-top boxes are going to deliver more 3-D power to televisions, but he said the performance required is nothing close to that seen in PC games. "If the machine is not going to do games, it will not require much graphics performance and the cores available now to deliver those capabilities are so cheap that they are essentially free," he said. "Set-top boxes could become a potential application for a business, but not a really big application. They are kidding themselves if they think they can sustain a business with it."