Sign in with
Sign up | Sign in

What's next for ATI: Interview with Dave Orton

By - Source: Tom's Hardware US | B 0 comment
Tags :

Chicago (IL) - Dave Orton is President and Chief Operating Officer of ATI Technologies and will be become the company's next CEO on June 1, 2004. Tom's Hardware Guide sat down with Dave Orton to discuss the transformation of ATI into an admired chip manufacturer and how Orton intends to keep and increase ATI's lead.

Dave Orton joined ATI when the firm acquired ArtX in April 2000, where he served as President and Chief Executive Officer. He leads ATI's Senior Management team and will be appointed CEO on June 1. In his current role, Dave Orton is responsible for the overall operational activities of ATI worldwide, including sales, marketing, research and development, customer service, distribution, finance, administration, customer satisfaction and quality.

ATI recently introduced its next next generation graphic chip, the X800 series. Once again, the company was able to defend its lead over Nvidia which had introduced its 6800 series just one week before. ATI has had a great run but faces stronger competition in the desktop market and will need to extend market shares in other areas to keep its current pace. We have talked to Dave Orton and asked what we can expect from ATI in the months ahead.

Tom's Hardware Guide (THG): Mr. Orton, you will become ATI's next CEO on June 1st. ATI's revenues show sharp increases, your margins are rising to record levels, the firm's cash position is solid and you maintain performance and market leadership with your products in several markets. Looks like you take seat in a very comfortable chair.
Dave Orton (DO): The role I am going into is not really new to me. I have been doing this job for more than 3 1/2 years. From my perspective, it is really just a change to reflect how K.Y. [Ho] and I operate the company. The whole team at ATI and I have been focussed to get the company to this position for several years and we continue to move it beyond the position we are in today. You never can be comfortable in our business.

THG: Since you joined ATI in 2000, the company has made a remarkable transition. From a position clearly behind Nvidia in terms of technology and market shares, ATI has come back strong. From the view of your product line and your balance sheet, ATI today looks a lot like Nvidia - a reason for your success?
DO: We lost our technology leadership position in 1999 and 2000. That is a fact. It is clear that Nvidia got ahead of us with the TNT2, GeForce 1 and GeForce 2. One of the big changes we made was to focus on driving performance and technology leadership at all cost. We believe that everything starts with product and technology leadership. We opened up all constraints for the design teams and went to win in the high end PC market. Other things then fell into place. I do not think that we have become a lot like Nvidia. I believe that Nvidia has become a lot like us.

THG: People who buy graphics cards often are not sure whether to but ATI's or your competition's product. Do you have to work harder to differentiate ATI from Nvidia and how do you plan to do that?
DO: The core pillar in this strategy is product leadership. Nvidia probably would say the same. In a sense, [the desktop market] is a segment where we are head to head. ATI has core technologies and people that give us an advantage, where we believe the graphics industry is moving to: Much more to a combination of graphics and video than today. Also, our investment in notebook and power management for the handheld and notebook market is going to be a valuable core technology - even for the high end desktop. Power is becoming an issue there, too.


THG: At a recent press conference, ATI representatives mentioned that your company works on increasing its market share of desktop graphic chips from today about 40 percent to 60 percent. Is this still a realistic goal?
DO: I do not remember such a statement. You cannot look at a single quarter to see what is going on in our industry. You rather want to look at it from a trend standpoint. Our focus continues to be a broad product line - top to bottom. Nvidia's 6800 has not changed any of our goals when we look to the rest of the calendar year 04. We would like to reach 50 percent of the market in the short term. We believe that we have the product line and the roadmap to get the lead.

THG: What is your strategy to achieve this goal?
DO: It will take a a broad range of marketing, products, software, transition points, customer relations and the right partners in the channels to do all that. We are still learning in the channel, especially how to be more effective in Eastern Europe, China and South America.

THG: Nvidia's 6800 has impressed large parts of the industry as well as media. Were you surprised by the performance leap of the product?
DO: We were expecting Nvidia to push ahead. But I would say that there were surprises in some areas. The die size is bigger than we thought and the power consumption is higher than we expected. They also followed up architecturally to 16 pipes. We expected them to end up expanding internal processing instead. I am also surprised that they have not been able to reach a higher core frequency.

THG: Both, the Nvidia 6800 and ATI X800, mark huge performance advances. Do you see the pace of innovation in the graphic chip segment to accelerate again in the foreseeable time?
DO: Actually, when we announced the 9700 in 2002, it also was huge in terms of innovation and performance. We brought cinema quality rendering to the PC. But if we look right after the X800, the next 18 months probably will show more innovation than the past 18 months. That is a fair statement.

THG: Where does ATI currently see opportunities for innovation?
DO: If you look at memory technology, there is continued opportunity to bring memory bandwidth to a higher level. We continue to look at how we drive process technology, and bring this to the concept of power management. We also have PCI Express coming to the PC right in front of us, which will provide a huge opportunity to advance the whole platform.

THG: Where do you see the best chances for growth in your product portfolio?
DO: The biggest opportunity is in the desktop integrated market where we are very low today. The desktop discreet market also continues to be a good opportunity. Beyond the PC, the overall biggest opportunity will be the cell phone market, which will be strong in the short to midterm. I get most excited about the digital TV business. The world is going from standard to high definition, with a potential of 100 million TVs worldwide. Within the next three to four years, those sets will go to High Definition as each geography starts to cut over to HD signalling. Looking at our product map and customer wins, we are extremely well positioned here.

THG: The integrated market becomes more and more a battlefield dominated by Intel with a market share of more than 60 percent, according to Mercury Research. How do you plan to earn money in a market with low margins and competition which kept control of pricing for quite some time?

DO: Intel does not cover the complete universe of integrated chipsets. We think about complementing their presence. We can bring the the capability of ATI graphics, software stability and stack to this segment. We believe that there is a prime short term opportunity to gain market share. It is not so much about going head to head with Intel, but to fill the gaps around Intel and go head to head with the Via's and SiS's. We are confident that this market has enough room left from a margin perspective.

THG: What are your expectations from the Xbox business? Nvidia has been left with a sour taste of deals with Microsoft. How do you intend to change the picture?
DO: We pursue a different model than Nvidia did with the Xbox 1. We did not go into the business thinking we can sell chips to Microsoft. We are providing our technology under a royalty model. Microsoft has worked to get the lowest price solution from a chip level. TSMC will be building these chips. Unfortunately I cannot provide more details at this time.

Discuss
There are 0 comments.
This thread is closed for comments