Q&A with AMD’s Rick Bergman on the graphics sweet spot

Rick Bergman is the senior vice president and general manager of the graphics products group at chip company Advanced Micro Devices. His team of graphics chip designers –- formerly known as ATI Technologies until AMD acquired the company in 2006 — has scored well with the recent launch of the ATI Radeon HD 4800 series family. The so-called “sweet spot” strategy caught rival Nvidia flat-footed. While Nvidia created a high-end graphics chip that burned a lot of power, AMD created a smaller chip that targeted the middle of the market. It decided that it could put two such chips into a board to create a low-cost, top-performance solution for high-end gamers. Meanwhile, the single chips could be easily targeted toward the mid-range and low-end of the markets. Nvidia, by contrast, has had to wait longer to redesign its chips for the mid-range and low-end markets. The result has been a big shift in market share from Nvidia to AMD, whose graphics chip division is now profitable after a tough 2007. I spoke with him at AMD’s recent analyst meeting at its headquarters in Sunnyvale, Calif., after Bergman gave an upbeat outlook for AMD’s graphics business.

VB: How long ago did ATI started thinking about its “sweet spot” strategy?

RB: It was three or four years ago. We recognized we could not continue on with huge die sizes. It was before the merger with Advanced Micro Devices. We were still working on a chip called the R600. We were thinking of what we could do for the R700. We decided we couldn’t do another chip that was so big because of power consumption. You can just plot how die sizes have grown generation after generation.

VB: Did it take graphics chip designers longer than microprocessor designers to realize that power was going to be a problem?

RB: The microprocessor designers ran into it first because they were pushing frequency. When you do that, it pushes the circuits to the limit and consumes a lot of power. We started from a lower frequency base. Graphics processing units (GPUs) started requiring more and more performance to do better 3-D images. We weren’t able to lower voltage, and so it was clear we were going to run into the fundamental laws of physics.

VB: You looked at this problem from a different perspective when you were an underdog?

RB: About three years ago, we were around 50 percent plus market share position. We were not in a tailspin. We were looking at where the problems were. Where the growth was in the market. We had a chip called the R300. That was the first 256-bit GPU. It let us get the crown. It cascaded into multiple years of success for ATI. As we made this decision, we had chips like the R580 which were the best in the industry.

VB: How did the strategy gel?

RB: It wasn’t unanimous that we were headed down the right path. There were many painful discussions. It started to become clear when we taped out (finished the design of the chip). We knew our chip size, performance and power. We felt like we had a winner.

VB: The merger between AMD and ATI came in the middle of all this in 2006. Did that stretch out the execution on your strategy?

RB: The acquisition was a little bit of a distraction. But our teams stayed as focused as we could.

VB: There was a time when you were on the defensive.

RB: Yes, 2007 was a tough year for us. We were losing market share. Our products weren’t as competitive as we would have preferred.

VB: Has the result played out as