Theo Valich claims Intel's Larrabee could become a major hit right out of the gate when it's launched as numerous Taiwanese graphics card companies will gladly support the chip. Take it with a grain of salt but Valich claims the CEO of one of the largest video card manufacturers told him he would happily ditch AMD and NVIDIA to secure his company's future with Intel's design policy:
Larrabee, in fact could become a major hit right out of the gate when it launches in the 2010 time frame, at least if the current market trend continues. TG Daily had a chance to chat with numerous graphics card companies, which combined account for more than 70% of ATI and Nvidia boards on the market, and the general view appears to be the same.
The CEO of one of the largest manufacturers told us that he happily would ditch AMD and Nvidia completely and go for Larrabee alone since he would be able to secure his company’s future with Intel's design policy.
The apparent problem is a cutthroat price war between Nvidia and ATI pushing add-in-board (AIB) companies into a margin of 2% or less. Most of companies are even believed to lose money with every card you buy, since some ATI and Nvidia parts have a negative margin.
Why negative? Because both AMD and Nvidia push partners to keep the prices as low as possible, and in a lot of cases this means there is no money left for research and development. In the end, AIB vendors may be forced to buy boards from ATI and Nvidia. The result may be that a company is caught in a downward spiral. According to our sources in Taiwan, two current graphics card manufacturers may actually be on the verge of bankruptcy because of this policy.