Nvidia beat earnings expectations for its first fiscal quarter ended April 28.

The world’s biggest standalone graphics chip maker reported non-GAAP (generally accepted accounting practice) revenue of $954.7 million, down 14 percent from $1.11 billion in the previous quarter and up 3.2 percent from $924.9 milllion a year ago. Non-GAAP earnings per share were 18 cents, compared to 35 cents in Q4 and 16 cents in Q1 a year ago.

Analysts had expected earnings per share of 10 cents on revenues of $940.6 million. Analysts have been worried about a steep drop in the PC business and the effect that can have on Nvidia’s core business of making graphics chips for PCs. But Nvidia has been diversifying for years into mobile devices with its Tegra line of mobile processors.

As previously mentioned, Nvidia plans to return more than $1 billion to shareholders in the form of share repurchases and dividends.

“The success of Kepler-based GPUs within and beyond the PC helped drive another quarter of record margins,” said Jen-Hsun Huang [pictured], president and chief executive officer of Nvidia. “Kepler is capturing share among gamers, strengthening our workstation and supercomputing segments, and will fuel new growth opportunities for our GRID server graphics solutions. With Tegra 4 devices and Tegra 4i certification on the way, we’re gearing up to return to growth in the second half.”

In after-hours trading, Nvidia’s stock price is up 2 percent. Looking forward to the second fiscal quarter, Nvidia expects revenue of $975 million, plus or minus 2 percent, and non-GAAP gross margins are expected to be flat at 54.6 percent.

Nvidia’s Kepler-based PC graphics chips, such as those in the GeForce GTX Titan card, are selling well. Nvidia also said it has engaged with more than 100 potential customers for its GRID VCA visual computing appliance, which helps workstation users become more mobile through cloud technology. Nvidia has also introduced its Tegra 4i chip, which combines a 4G LTE modem with a mobile processor. That could give Nvidia an advantage in mobile devices the future.

Patrick Moorhead, an analyst at Moor Insight & Strategy, said, “Nvidia’s solid earnings came on the back of higher-end Kepler-based gaming and workstation chips and cards where they have been gaining a lot of mindshare. The Tegra business was on a roll in the past few quarters driven by wins in Google Nexus 7 and Microsoft RT’s tablets, but that appears to have receded. While Tegra 4 hasn’t been benchmarked yet by reviewers, controlled bench-set [non-phone/tablet] numbers supplied by Nvidia shown that it performs pretty well, but the challenge will be bottling that into a phone. Project Shield [Nvidia's upcoming handheld game device] could end up being the biggest surprise as it leverages trends in mobility, Android gaming, and will also pull from the console business.”

At the company’s recent investor day, Huang said that the company was investing heavily in its operations now because it has some “once in a lifetime opportunities” in mobile computing.

Huang said during the investor day that those investments are timely because the “PC business declined more in the last quarter than in the last 20 years. Obviously, the computer industry is changing.”

Nvidia has made PC graphics chips since 1993. It is the only standalone survivor in that business, and it competes against processor giants such as Intel, Advanced Micro Devices (ADM), ARM, and Imagination Technologies (including MIPS).

Huang said during the investor day that Nvidia’s Tegra business is at break-even, even as the company ratchets up the investment to more than $300 million a year. Overall, Nvidia research and development has reached $1.2 billion annually. About $880 million of that is core investment in chip design, while $10 million each is focused on new opportunities including Grid systems and the Project Shield handheld gaming system.

“We increased our operating expenses to invest in once in a lifetime opportunities,” Huang said during the investor day. “These investments are so timely and they must happen now. So our first half is rather muted. We’ll have growth in the second half. The disruption of the traditional market literally happened overnight. That’s why it’s so important for us to keep our foot on the gas.”

This year, Nvidia is investing heavily in the first half in the hopes of achieving growth in the second half, Huang said. He pulled in investments in Tegra 4i, a mobile graphics processor with built-in LTE modem. That investment, he said, “was a good decision by all measures.” That pushed out the debut of Tegra 4 by a quarter, from the first to the second quarter. As a result, Tegra sales will be flat for the year, he said.

Overall, “the exciting thing is the market opportunity ahead of us,” Huang said. The total available market for Tegra chips [with $300 million investment] is $10 billion. The opportunity for Grid computing is $10 billion, and the traditional graphics processing unit (GPU) market opportunity is $6 billion, Huang said. Huang said he thinks the computing business, if not PCs, will continue to grow.

Huang said that GPUs are Nvidia’s “crown jewels,” generating billions of dollars in revenues on the PC thanks to PC gamers and other enthusiasts. Nvidia is in the process of “mobilizing” those crown jewels in products such as Tegra. About three billion devices with graphics chips will be shipping by 2015, at a 12 percent compound annual growth rate. Nvidia is gunning for a sizable share of that.

Huang mentioned that Nvidia has more than 5,000 patents, mostly related to computer graphics. Nvidia is investing in games, enterprise, and computing devices.

With Grid computing, Nvidia is taking that business into the cloud, enabling remote graphics processing and it will lead to multiple users on a single graphics chip.  But Huang said the competition was fierce.

Huang said earlier that Nvidia will return $1 billion this fiscal year to shareholders in the form of stock buybacks and dividend payments, including $100 million in stock being repurchased this quarter. This will bring to $1.2 billion the total capital returned to shareholders since the company announced its quarterly dividend program in November.

Nvidia’s GPU business in the first fiscal quarter had revenue of $785.6 million, dow 5.6 percent sequentially and up 8.1 percent from a year ago. Nvidia saw declines in both desktop and notebook revenue. PC makers continue to closely manage inventory in advance of the Intel Haswell platform launch in June. Tegra revenue was $103.1 million in Q1, down 50.5 percent sequentially and down 22.2 percent from a year ago. The decline happened as Nvidia makes the switch from Tegra 3 to Tegra 4.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Advanced Micro Devices is launching a new high-end graphics card today with some serious horsepower. The Sunnyvale, Calif.-based chip maker says it has retaken the crown for the world’s fastest graphics card.

The AMD Radeon HD 7990 card, with two chips, has more than 8.6 billion transistors, and it has 4,096 stream processors that can produce 8.2 teraflops of computing power. It can support 4K resolutions on the newest monitors and TVs, and can run six displays at once.

AMD is going to package the graphics card with dual Tahiti-based chips for $999, and it will throw in eight high-end PC games for free: BioShock Infinite, Tomb Raider, Crysis 3, Far Cry 3, Far Cry 3 Blood Dragon, Hitman Absolution, Sleeping Dogs, and Deus Ex Human Revolution.

The number of transistors is impressive, considering the original microprocessor, the Intel 4004, had just 2,300 transistors. Nvidia’s most recent Kepler graphics processing unit (GPU) has about 7 billion transistors. That is an example of the progress of Moore’s Law, the observation by Intel Chairman Emeritus Gordon Moore, who said in 1965 that chip transistor counts would double every couple of years.

Devon Nekechuk, AMD graphics product manager, said in a press briefing that the new cards are faster than Nvidia’s high-end GeForce GTX 690 chips and they can run games like Crysis 3 at 3840-by-2160 resolution. It can support 6GBs of GDDR5 memory, and it has 48 lanes of PCI Express 3.0 input-output for a total bandwidth of 96 gigabytes a second between graphics processors.

“We wanted to support the highest memory possible because the high-end games are memory starved,” Nekechuk said.

AMD also has its graphics chips in the upcoming Sony PlayStation 4. Nekechuk said that AMD’s 7990 cards were in PCs that Electronic Arts used to demo its upcoming Battlefield 4 video game. In scenes from games like the top-selling BioShock Infinite (pictured), AMD showed how the lighting was more crisp and details more fleshed out using the 7990.

Noise has been typically the curse of high-end graphics cards, as they run so hot that they need fans. But this chip and its graphics card produce about 37.8 dBAs of environmental sound, compared to 47.5 dBAs for the Nvidia GeForce GTX 690. The chip can put itself to sleep to save on power when necessary.

“When you’re playing a game with the AMD 7990, noise is no longer a factor,” Nekechuk said.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Jeff Herbst and his employer Nvidia “get it” when it comes to emerging technologies. For a long time, he has been finding startups for Nvidia, the world’s largest maker of standalone graphics chips, to invest in. Back then, his team found Keyhole, a mapping startup that later became Google Earth and which spurred demand for non-gaming 3D graphics on PCs.

The goal isn’t just to make money but to lift the whole ecosystem for visual computing so everyone can prosper. Such investments are aimed at spurring activity in Nvidia’s business, which includes Tegra mobile processors and CUDA non-graphics computing functions performed by its graphics chips. This week, Nvidia expanded that further with the launch of its Grid Visual Computing Appliance server and its future graphics chip roadmap.

Herbst, the vice president of business development at Nvidia, has been staging tech contests at company events for the past five years. At  this year’s GPU Technology conference in San Jose, Calif., Herbst hosted the fifth annual Emerging Companies Summit, where 21 companies made appearances to pitch investors. All of the companies were riffing on the theme of visual computing, which Nvidia espouses as a way to broaden the reach of its graphics processors.

Here’s an edited transcript of our interview with Herbst.

GamesBeat: So this is your latest Emerging Companies Summit. What’s new?

Jeff Herbst: Yeah, we’ve come back. Our fifth event in San Jose and our eighth event worldwide. My two themes for this year were to explain to people who Nvidia gets it and that we’re here to help.

When I say we “get it,” I mean that when people are doing things with graphics processors and visual computing, high-performance computing, cloud computing, mobile computing, and they want to explain it to someone who is going to understand what they’re doing and why, we’re here. We get it.

There’s a story that Keyhole Corporation, now known as Google Earth, came to us back in 2001. Nobody got it. Keyhole itself thought that the application was going to be used for real estate developers and real estate professionals to be able to view property before they bought it. I immediately realized that that’s a decent market. It’s probably in the millions. But there are billions of people that use Google and Yahoo and all the other search engines and portals. They were having trouble getting people to give them money based on that original business model.

We got it, and we helped. Now they’re Google Earth. We’re trying to do the same thing over and over. The ECS is a big part of how we do that. People know that we’re going to understand what they’re doing. The other companies who are here understand what they’re doing. The VCs and investors in our network understand what we’re doing.

GamesBeat: How have the amounts available to you changed over the years? How much can you invest in a year?

Herbst: We have no limits, up or down, on what we can do. It’s all based on the amount of strategic synergy that we find with the companies. We’re not financial investors in that we typically don’t invest without some kind of strategic partnership associated with the investment. If the companies don’t really need our money or there are Sand Hill Road VCs that want to give them money, we’re more than happy to facilitate that and watch those companies prosper and those investors prosper. Our ecosystem benefits from that.

To us, it’s all about building the ecosystem. It’s not about financial returns. However, to the extent that we do invest, we would like to achieve both. We won’t invest in things that don’t have a promise of financial return. It’s a delicate balance.

GamesBeat: Historically, have you been going up or down with the investment amounts over the years?

Herbst: Our investments have ranged from $500,000 to $10 million. We just made another investment in the $2-million range. We haven’t announced it. Our sweet spot is probably about $2-3 million. It depends on the situation. There’s no reason we couldn’t invest a lot more than that if the situation dictated it.

GamesBeat: Have you had a cycle of sorts as well? Was there a peak here for you and a fall-off from that?

Herbst: We were very active about two or three years ago. Then we became a little bit less active for a variety of reasons, one of which was — I think when you invest in companies, you want to have great partners, and you want to have financial investors backing you. The venture cycle tailed down over the last couple of years. I feel it’s coming back, though.

We’re also seeing a lot more opportunities for us to synergize companies with more than just giving them money. I expect the cycle to keep moving up. Right now our active portfolio is about 10 companies. We’ve had some exits in the past. I would give you all the names, but we don’t publicize all the things we do. It’s not about us. We don’t feel like we have to put out a press release every time we invest money in some startup to boost our own ego or pump our own company.

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Not everybody has the cash to buy a face-melting gamer PC. But Advanced Micro Devices is prepared to make the buyers of midrange, moderately priced game computers feel pretty darn good.

The Sunnyvale, Calif.-based chip maker is introducing its AMD Radeon HD 7790 graphics chip today. Code-named Bonaire, the new chip will be pretty impressive, with 2.08 billion transistors, or the basic on-off switches of electronic devices. The chip runs at 1 gigahertz and has 896 stream processors and 14 non-graphics compute units.

But even as a midrange device, it’s no slouch. It can process data to memory at 6 gigabits to second and power six displays at the same time while consuming about 85 watts of power, said Evan Groenke, an AMD graphics product manager, in a press briefing. It will be interesting to see if the super geeks debate whether this chip will be more powerful than what Sony will use in the upcoming PlayStation 4 video game console.

AMD doesn’t really care as it has the console business locked up. Its chips are used in the Nintendo Wii U and the PlayStation 4, and they are rumored to be in Microsoft’s next game console. The company says it is doing well bundling leading games like Tomb Raider with its graphics cards.

“AMD is a leader in all aspects of gaming,” said AMD graphics product manager Devon Nekechuk. The graphics card has a 128-bit memory interface and can process 1.79 teraflops, or intensive math equations.

The company says its chip is on average 20 percent faster than rival Nvidia’s GeForce GTX 650 Ti chip in running games such as Skyrim or Far Cry 3. Seven major graphics card manufacturers are shipping the product now. Prices are to be announced.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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SAN JOSE, Calif. — Nvidia unveiled the next-generation chips in its roadmap for desktop computers and mobile devices today. And by 2015, those devices will be 100 times faster than they were in 2011.

Jen-Hsun Huang, the chief executive of Nvidia, made the announcements at its GPU Tech conference today in San Jose, Calif. He said that the company’s next-generation graphics core for desktop and high-end mobile computers will move from Kepler to Maxwell in 2014. By 2015, Nvidia will launch Volta, a chip that includes its first instance of Denver processing technology.

With Volta, Nvidia will move to 3D transistors and stacked memory, or memory chips on a circuit board that are stacked on top of each other.

Meanwhile, Nvidia is also refreshing its lineup of Tegra mobile processors for smartphones, tablets, and other power-efficient devices. Nvidia is currently shipping (or about to ship) its Tegra 4 mobile processors. By 2014, Nvidia will launch Logan, which will presumably be called Tegra 5, and it will launch Parker in 2015. From 2011 (with Tegra 2) to 2015 with Parker, Nvidia’s processing power in Tegra chips will have grown 100 times in performance. Normally, chip improvements would call for an eight-fold increase in performance.

“You’re not the only one who has been holding their breath for these chips,” Huang said in his keynote speech.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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SAN JOSE, Calif. — Nvidia has nearly crossed the uncanny valley. The graphics computing giant debuted a technology today that showed how its graphics chips can render a human face with nearly flawless realism.

Jen-Hsun Huang, the chief executive of Santa Clara, Calif.-based Nvidia, unveiled Faceworks, which can create a human face and make it move like a real person’s. It still looks slightly fake, but that slightness is far better than computers have been able to do in the past. And this face pictured above, dubbed digital Ira, can be rendered with a single GPU (graphics processing unit).

The face above can be rendered with about two teraflops of computing power, or about half the power of Titan, Nvidia’s newest graphics chip with a whopping 7 billion transistors. It runs in real time, and so it could appear in a computer game.

You can now zoom in on a rendered face and see pores, wrinkles, hair blowing in the wind (not on this guy), and other real human flaws. Huang said that, working with Paul Debevec’s computing lab at the University of Southern California, animators can capture real human expressions. They capture about 30 expressions on video and then mold those expressions into realistic behavior and animations for a human face.

Huang said that the quality of the animations is now approaching the quality that it takes to cross the “uncanny valley,” or the observation that the more real you make an animated face, the creepier and less realistic it looks.

He made the comments in the opening day keynote at the GPU Technology conference at the San Jose Convention Center in San Jose, Calif.

“If we are not at a tipping point, we are racing at it,” he said.

Patrick Moorhead, analyst at Moor Insights & Strategy, said, “I have seen many demos like this using Light Stage technology for the last few years, but they were rendered post-production, not real time.  Products like Nvidia’s Titan enables the real-time  rendering of faces that could really change real-time communications.  It could be a lot of fun, too.  Imagine if you are playing online games with friends and their avatars could be these real-life faces.  You could use your favorite villain or character.”

Nvidia also had a method for rendering realistic ocean waves. Dubbed Waveworks, the technology made it a lot easier for animators to produce waves that bounced with the same physical properties as water.

Nvidia’s Dawn from VentureBeat on Vimeo.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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PC makers are announcing new gaming PCs today with Nvidia‘s new GeForce GTX Titan graphics chips and the cards that house them. The Titan graphics systems serve as the backbone of the world’s fastest supercomputer and they are now being released as the flagship chip in Nvidia’s graphics processing units for personal computers.

The new GeForce GTX Titan uses the same Nvidia Kepler architecture that powers the Oak Ridge National Laboratory’s Titan supercomputer, the No. 1 machine in the list of the Top500 supercomputers in the world.

“GeForce GTX Titan will allow us to create the nearly-impossible product our customers have wanted for years: a ridiculously fast, tiny system that you barely know is running,” said Kelt Reeves, CEO of PC maker Falcon Northwest.

PC makers will be able to put three Titan GPUs in three-way SLI mode in a single PC. Nvidia says that means “gamers can max out every visual setting without fear of a meltdown while playing any of the most demanding PC gaming titles. Nvidia keeps the chips from overheating by using high-efficiency vapor chamber cooling.

“GeForce GTX Titan is a beast of a GPU—and the only one in the world powerful enough to play any game at any resolution at any time,” said Scott Herkelman, general manager of the GeForce business unit at Nvidia. “And, yet, all of this immense power is housed in a sleek, sexy design, so gamers can also build beautifully-designed PC gaming machines about the size of a gaming console, yet magnitudes more powerful and always upgradeable.”

Titan chips have more than 7 billion transistors and 2,668 GPU cores, or 75 percent more than the company’s Nvidia GeForce GTX 680 GPU. It delivers 4.5 teraflops of single-precision and 1.3 teraflops of double-precision processing. The Titan GPU will be available on Feb. 25 from partners including Asus, EVGA, Colorful, Galaxy, Gigabyte, Inno 3D, MSI, Palit and Zotac. The price is $999.

PC makers selling systems based on Titan include AVADirect, Cyberpower, Digital Storm, Falcon Northwest, Geekbox, Ibuypower, Maingear, Origin PC, Puget Systems, V3 Gaming, Velocity Micro, and other system integrators outside North America.

Maingear’s new systems (pictured at top) include the Shift, F131, and Potenza desktops. The machines can support up to four monitors at the same time. Digital Storm, meanwhile, is introducing its Bolt gaming computer tha tis just 3.6 inches wide. That machine starts at $2,499.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Advanced Micro Devices is squarely targeting hardcore gamers with its AMD Never Settle Reloaded bundle, which gives a bunch of free games with a graphics card purchase.

AMD makes the Radeon series of graphics chips, which are housed in add-on cards for persona computers. For gamers who buy the graphics cards, AMD has a special offer. The whole point is to try to get an edge over rivals Nvidia and Intel and work AMD’s brands into the minds of hardcore gamers, who spend tons of money on both gaming hardware and games.

If you buy two AMD Radeon HD 7900 series cards (for use in a single gamer PC), you can get six games for free: Crysis 3, BioShock Infinite, Tomb Raider, Far Cry 3, Hitman: Absolution, and Sleeping Dogs.

For the purchase of a single AMD Radeon HD 7900 series card, you can get Crysis 3 and BioShock Infinite for free. If you buy an AMD Radeon HD 7800 series card, you can get BioShock Infinite and Tomb Raider for free, said Devon Nekechuk, product manager at AMD, in a briefing call. If you prefer, you can get DmC and BioShock Infinite with an AMD Radeon HD 7800 series card.

Tomb Raider debuts on March 5, while BioShock Infinite is out on March 26. DmC: Devil May Cry is already out. And Crysis 3 debuts Feb. 19. For these games, AMD will give you a code once you register with them. You can use that code to download the games on Steam or your preferred platform once they become available.

Last fall, AMD launched its AMD Never Settle Bundle with four games: Far Cry 3, Hitman: Absolution, Sleeping Dogs and Medal of Honor: Warfighter. That amounted to $170 in free games with a graphics card purchase. And in the spring of 2012, AMD gave three games away with a card purchase.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Advanced Micro Devices chief executive Rory Read said he foresees “continued choppiness” in the PC market for the first half of 2013. In a conference call with analysts, Read said that the company’s fourth-quarter loss was due to a challenging macroeconomic environment and weaker-than-expected PC market.

“As I mentioned on our last earnings call, we are executing a turnaround that will take several quarters,” Read said (pictured above) on the call. “We expect continued choppiness in the PC market in the first half of 2013, and will closely manage the business as we reset, restructure and ultimately transform AMD.”

He said AMD will continue to focus on markets that are adjacent to its PC microprocessor and graphics chip businesses. The specific segments AMD will focus on include dense server, semi-custom, embedded, and ultra-low-power client markets. Those are areas where AMD views Intel, the world’s biggest chip maker, might be vulnerable to competition.

AMD is completing is restructuring, including layoffs of 15 percent of its staff, in the first quarter. AMD said it has its graphics chip in the Nintendo Wii U game console, but it has been mum about rumors that its chips will be used in upcoming consoles from Sony and Microsoft.

Read said that AMD grew sales on Black Friday for AMD-based notebook computers sold at retail. One in three notebooks sold in the U.S. in the fourth quarter had AMD chips, Read said. During the quarter, AMD added TV and PC maker Vizio as a new customer. Vizio’s first AMD products included two touchscreen laptops and a Windows 8 tablet.

During the quarter, AMD began shipping its code-named Richland accelerated processing unit (APU), which combines graphics and microprocessor functions on the same chip. AMD also had design wins for its Kabini APU and ultra=low-power Temash APU. Both of those chips are going through final internal testing and are expected to ship in the first half. Kabini and Temash target the market for notebook computers, tablets and convertibles, which are laptops that can also be used as a touchscreen tablet.

Read said the company will launch strong new APU and graphics chips in the first half of 2013 that will help grow its business.

“This is an unprecedented time in the PC industry,” Read said.

Jen-Hsun Huang has thought about making Project Shield, the portable Android gaming system that Nvidia unveiled this week at the Consumer Electronics Show, for the past seven years. But the chief executive of the world’s biggest graphics chip maker had to pull a lot of things together first before deciding to make it — like figuring out how to make a gaming console.

Nvidia designs chips such as the Tegra 4 inside the Project Shield, but it’s never gone directly into the consumer market with its own game system. (It did go out on its own into the retail market before with its 3DVision 3D glasses in the past). Nvidia has also worked to establish a cloud gaming network dubbed the Nvidia GeForce Gaming Grid, which provides the underlying foundation for delivering games to the Shield device, which includes a 5-inch screen atop a game controller. Then it designed a new kind of processing for its latest graphics chips. And in the past year, it put the finishing touches on its Tegra 4 mobile processor, which has four computing cores and 72 graphics cores.

It would be wrong to think that Shield is just another Android game controller. It has a whole ecosystem built around it and high-end components for hardcore gamers. In short, Project Shield is a massive effort that required the work of thousands of Nvidia employees. Now, it’s finally ready, and Huang showed Project Shield to us in an interview at the Nvidia booth at CES. (See our hands-on vide0). Here’s an edited transcript of our exclusive interview.

GamesBeat: How heavy is it? A pound or so?

Jen-Hsun Huang: Here you go. It’s under a pound. A bit under a pound.

GamesBeat: It feels like a regular Xbox controller. 

Huang: Exactly. That’s ideal. We haven’t tuned any of the knobs on this, or the buttons, but ideally it should respond just like one. The moment you pick it up, you should recognize it as a controller.

There are two things that we wanted to do. We wanted to make sure that for anybody who picks it up, and in the moment that they do, they’re instantly familiar with it. All the controls are exactly where they expected. Secondly, because it’s pure Android, you know exactly how to use it. Because this is pure Android. If you’re an Android user — and this is targeting Android users — the moment that you turn it on, your whole life shows up. All your music is there. All your movies are there. All the Tegra Zone games you’ve already bought on your phone are there.

GamesBeat: What are some of the reactions you’ve heard so far? 

Huang: I would say that the No. 1 reaction is, “Wow, it’s a lot smaller than I expected.”

GamesBeat: What design decisions can you talk about? You could probably have just had a tablet sitting on top of something that you could attach, taking the controller away. I think I’ve seen other designs like that out there already. Is there a reason not to do that?

Huang: First of all, a tablet is too heavy. It’s too top-heavy. Second, notice that this isn’t a tablet. It’s just a display. All of the electronics, the batteries, are in here. The balance of the system wants to be in your hand. Even a phone is too top-heavy. Worse, you don’t want to drain the battery life of your phone. Your phone is used for communication. The benefit of using Android is that all of the content on your tablet or your phone automatically shows up here. The instant familiarity of the system is a real plus. The connection to your open system, with all of your digital content, is a plus.

The design decisions started with this. It has to be a wonderful gaming device. The controller can’t be sacrificed. We started with the palms of your hands, how everything fit into your hand — the bumpers, the triggers, the buttons. They have to be in the appropriate places. Then we fit all of the technology around it. That’s No. 1. No. 2, it has to be as small as possible, to the point where the volume of this device is approximately a game controller. The reason for that is because if you’re willing to carry a game controller in your bag, then from a volume perspective, you want to carry this in your bag. The third thing, of course, is that the performance has to be amazing.

And then, the magic trick … as a device that is consistent with the way we expect to consume media in the future — wireless, cloud, streaming — those kinds of experiences have to be introduced. Streaming from your PC. We do streaming to your TV. In the future we’ll do streaming from Grid. Not only is this a wonderful game device, but it’s also gaming in a new way, the way that we expect to consume digital content.

GamesBeat: Are you filtering Android content in some ways so that it works with this?

Huang: No, not at all. This is pure Android.

GamesBeat: Some of those games are designed more for touch, though, as opposed to buttons. How does that convert?

Huang: The way we’ll do it is this. Everything will work. But for games that are designed for controllers and also optimized for Shield, we have the Tegra Zone. All of your games in here just work. This is your Android experience. Everything is there. This is your gaming experience. Tegra Zone pops up. You’re playing your games. If, all of a sudden, you got a text and you want to check it out, and if you want to go back to that game, it’s exactly like Android. The behavior is exactly the same if you’re connected to the PC.

GamesBeat: How much of the hard work focuses not just on this but also in the whole ecosystem around it? Like, for a console maker, they have to go round up all the game publishers and game developers to get behind a console some months or years ahead of time.  

Huang: We are perpetually doing that. You know that we work with game developers all over the world to enhance for GeForce or to optimize for Tegra. All of the optimizations that we made for Tegra are in Tegra Zone, and all of those games just showed up. For the last two years, all of the games that we’ve optimized for Tegra have already included controller support. We’ve been preparing for this day. All of those games, the 100 games or so, and the few hundred games in development right now, they’re all being optimized for this.

GamesBeat: How much of this resembles a console business and how much might be different or disruptive to it?

Huang: It’s completely different. That’s a really good question. We’re not trying to build a console. We’re trying to build an Android digital device, in the same way that Nexus 7 enjoys books and magazines and movies. This is an Android device for enjoying games. It’s part of your collection of Android devices. That’s how we think about this device. All of the economics associated with this device are exactly the same. We’re going to have to sell this device based on the value of this device, for people who are enjoying it and finding it useful.

The differences are this. The console, as you know, is proprietary, it’s closed, and it has a razor-and-blades business model. Our business model is open, it’s based on Android, it’s completely familiar to you, and the games range from free to free-to-play with virtual goods and also, of course, to premium games. This is the perfect platform for free-to-play. The free-to-play publisher wants to get their games on as many platforms as possible. Broad distribution is what they’re looking for. Broad distribution isn’t what the console guys are looking for. They’re looking for exclusivity. For us, this is just a fantastic thing we’re doing for that industry. That’s why free-to-play works great for PCs. Free-to-play is going to work great for Android, and if it works great for Android it’s going to work even better for Shield.

GamesBeat: What was going on in your heads during all of this time? People were saying that free-to-play was disrupting everything on Facebook, for instance, or iOS. They said that somebody had to bring this to the consoles and disrupt those $60-dollar console games, but nobody did it. Then things like Ouya started popping up. It seemed like it was taking startups to do something the established companies wouldn’t. You guys are an established company in different ways, partnering with some of those guys. What was your thinking when the opportunity for something like this came up?

Huang: If you talk to Julie at Ouya, she’ll tell you that her best partner in the world is Nvidia. We have hundreds of engineers working on her behalf to realize that game console. We love what they’re doing. But I frankly think that Ouya and that game console could be made by other companies aside from us. We can do it, but other companies can do it too. The reason why I built this device is because only we can build this device.

This device, Shield, has such incredible performance. It’s got the software stack that treats it like a server to stream to television. It treats it like a receiver for servers in the cloud and on your PC. The software that’s necessary to do that is so complicated. No company in the world is going to get it together. We’re going to have to do this. It’s the same technology that I was going to use for GRID anyway. The GRID technology goes into my PC. My PC now becomes a GRID server for this. I put that same technology in Shield. Now Shield becomes a GRID server for television. I’ve got all the technology that I can leverage. It’s very delicate and complicated technology, because it has to work, but it also has to work with very low latency.

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Advanced Micro Devices said today that it plans to launch new Radeon mobile graphics chips in January.

AMD says the new chips will fit well with trends developing in 2013, such as the launch of “ultrathin” notebooks and new machines with Microsoft’s graphics-intensive Windows 8 operating system. The chips are going to be integrated into notebooks that are hybrids, which can be converted into laptops or tablets.

“We brought up our game over the past year,” Jay Marsden, the product marketing manger for AMD’s notebook graphics, said in a press call. “We are introducing our next generation of mobile GPUs [graphics processing units].”

AMD calls the new generation the AMD Radeon HD 8000 series of graphics chips. This is the second generation of chips to use the company’s AMD Graphics Core Next (GCN) architecture, and it is aimed at bringing great gaming to thin laptops.

The chips have full DirectX 11 support and are built with 28-nanometer manufacturing. Marsden said that the new chips are more energy efficient than past chips in terms of power consumed and performance. The chips have AMD’s Enduro technology, which powers down the chip when it is idle. It also has acceleration for better videos, image compression, and image enhancement.

The new products include the AMD Radeon HD 8500M and 8600M chips. Both have 384 cores known as stream processors. The 8500M operates at 650 megahertz while the 8600M operates at 775 megahertz. With double-precision floating-point math calculations, the chips operate at 33 gigaflops and 39 gigaflops, respectively.

AMD will also launch the AMD Radeon HD 8700M series product, with 384 stream processors and clock speeds ranging from 620 megahertz to 850 megahertz, with gigaflop performance coming in at 33 to 43. The company is also launching its HD 8800M series, with 640 stream processors and clock speeds ranging from 650 megahertz to 700 megahertz. That chip operates at 62 gigaflops.

The company said the chips replace the previous generation of 7000 series graphics products. The new chips will be available Jan. 7. More details will be available at that time. Laptops using the chips will also be announced later, although the ASUS U38 laptop uses the chip and has already been announced.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Graphics chip giant Nvidia chief executive Jen-Hsun Huang said in a conference call with analysts today that consumers realize “a great tablet is better than a cheap PC.”

That’s an interesting statement coming from a PC industry leader who plays in both the PC and mobile markets. But Huang pointed out that in the most recent third fiscal quarter ended Oct. 28, 30 percent of Nvidia’s revenues now come from non-PC chips, up from just 3 percent three years ago.

Nvidia’s Tegra graphics-processor chips for mobile devices are grabbing solid market share in tablets and smartphones. Net income in the quarter was $209.1 million, 0r 33 cents a share, up from $178.3 million, or 29 cents a share a year earlier. Revenues were up 13 percent to $1.2 billion. Analysts had expected earnings of 30 cents on revenues of $1.2 billion.

Huang said that orders for Tegra chips for Google Android and Microsoft Surface tablets are helping offset a slump in demand for PCs, which use Nvidia’s graphics chips. Tegra is also used in new Lenovo and Asus tablets, among others.

“Our fundamentals are better than ever,” Huang said. “We’re increasing our share. The PC end market is uncertain. We’ll take a rather cautious approach to our outlook.”

Huang said that Nvidia is also executing well on the rollout of its Kepler-based graphics chips and is taking market share from rival Advanced Micro Devices. Huang is essentially doing a pretty good job of riding two horses at the same time without falling off. The PC market is 70 percent of his business, but it’s slowing down while the tablet and smartphone markets are growing.

Nvidia hasn’t seen much cannibalization in its markets because “we don’t really play in the cheap PC market.”

The bright spot is PC gaming, where players are buying advanced PCs with graphics that are much better than the current generation of game consoles.

For the fourth fiscal quarter ending at the close of January, revenue is expected to rise to $1.03 billion to $1.18 billion, Nvidia said. Analysts had estimated $1.21 billion for that quarter. Its shares are up 1.7 percent in after-hours trading to $12.90 a share.

Nvidia is investing heavily in a 4G LTE modem chip and in its next-generation mobile processor too.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The Oak Ridge National Laboratory has completed work on the world’s fastest “open science” supercomputer, dubbed Titan. The system is powered by thousands of microprocessors from Advanced Micro Devices and graphics chips from Nvidia. It can perform more than 20 petaflops (20 million billion floating-point math operations per second), and will be used to solve all sorts of tough computing problems such as calculating the effects of climate change on the Earth.

Made by Cray, Titan, also known as the Cray XK7 supercomputer, has some gargantuan specifications. The machine has the computing power that is equal to 500,000 laptop computers, or 20,000 trillion calculations per second. It has 18,688 compute nodes, or servers that are part of the larger supercomputer. It has 299,008 AMD Opteron cores, or microprocessor brains. It has 18,688 Nvidia Tesla K20 “Kepler” graphics accelerators. It also has 710 terabytes of system memory, and total peak system performance of 20 petaflops. The system has 200 server cabinets and a sophisticated cooling system. Each computing node has an AMD Opteron 6274 processor and an Nvidia GPU.

Nvidia says about 90 percent of the mathematical floating-point capability comes from its Tesla K20 graphics processing unit (GPU). The power efficiency of GPUs, which process lots of tasks in parallel, enables much more efficient computing to happen on Titan.

“We can augment the CPUs to provide power efficiency that is far better,” said Sumit Gupta, general manager of Nvidia’s Tesla GPU business. “This is like putting 500,000 laptops in a space the size of a basketball court.”

The supercomputer will attack problems related to climate change, biofuels, materials science, astrophysics, combustion, and nuclear energy. Scientists using the supercomputers will use it to make more efficient engines, higher capacity and lighter weight batteries, and search for cures for diseases.

Operated by the U.S. Department of Energy‘s Oak Ridge National Laboratory in Tennessee, Titan is another step toward an exascale computer, which targets performance of 1,000 petaflops by 2020. The supercomputer is part of an “open science” program that allows researchers from academia, industry and government to use it to solve all sorts of problems.

The machine is ten times faster and five times more energy efficient than its predecessor, the 2.3-petaflop Jaguar system, while occupying the same floor space. If Oak Ridge had upgrade the CPU-only Jaguar system by adding more microprocessors, the system would have been four times larger and consume more than 30 megawatts of power. That’s enough to power tens of thousands of homes. Jaguar itself required 7 megawatts, or enough to power 7,000 homes.

“Basing Titan on Tesla GPUs allows Oak Ridge to run phenomenally complex applications at scale, and validates the use of accelerated computing to address our most pressing scientific problems,” said Steve Scott, chief technology officer of the GPU Accelerated Computing business at Nvidia. “You simply can’t get these levels of performance, power- and cost-efficiency with conventional CPU-based architectures. Accelerated computing is the best and most realistic approach to enable exascale performance levels within the next decade.”

Work on Titan began three years ago with Oak Ridge’s plant to upgrade Jaguar, which was one of the former most powerful supercomputers in the world. Titan has three times the performance per watt of power used and three times higher performance per unit server.

“Science and technology have always been our primary goal, and Titan is a groundbreaking tool that will allow researchers worldwide to leverage GPU-accelerated computing to make unparalleled breakthroughs,” said Jeff Nichols, associate laboratory director for computing and computational sciences at Oak Ridge National Laboratory. “The new Tesla GPU accelerators offer the performance and energy efficiency that enable Titan to scale to unprecedented performance levels without consuming the energy equivalent of a small city.”

The Energy Department has awarded 4.7 billion hours of computing time on Titan and other supercomputers to 61 science and engineering projects with high potential for accelerating discovery and innovation through its Incite program. For instance, the department gave Boris Kozinsky of the Robert Bosch Corp. a grant 48 million core hours to discover and optimize new classes battery technology.

Advanced Micro Devices (AMD) hopes to jumpstart sales of its graphics chips and PC video cards by bundling top-selling video games with them.

The Sunnyvale, Calif.-based company is launching the Never Settle bundle that includes an AMD Radeon 7900 graphics card and multiple games for hardcore players. For those who buy the card, AMD will offer four major titles either free or at a discount. AMD needs the boost, as it recently reported a quarterly loss and said it would lay off 1,700 employees, or 15 percent of its workforce.

“This is the single most important game bundle of the year for Radeon graphics,” said Robert Hallock, AMD product marketing manager, in a press briefing. “This is the biggest graphics card bundle we have ever offered, and this is probably the biggest graphics card bundle that has ever been offered in the graphics industry.”

The bundle comes with an AMD Catalyst driver and free PC copies of Far Cry 3, Hitman: Absolution, and Sleeping Dogs. In addition, customers will be able to get a 20 percent discount on Medal of Honor: Warfighter. All of the titles are major releases for the fall.

The bundle has several options. If you buy an AMD Radeon HD 7800 series graphics card or a Radeon HD 7770 GHz Edition card, you can get Far Cry 3 for free and Medal of Honor Warfighter for 20 percent off. If you buy two AMD Radeon HD 7850 series graphics cards ($399), two Radeon HD 7770 GHz Edition cards ($239), or two Radeon HD 7870 GHz Edition cards ($499), then you can get Far Cry 3 and Hitman: Absolution for free as well as the 20 percent discounter on Warfighter. The value of the games in the bundles ranges from $60 to $170.

The new Catalyst 12.11 driver software provides a 15 percent performance gain in titles such as Battlefield 3, Medal of Honor: Warfighter, Sleeping Dogs, and Dirt: Showdown. The bundle will be available in October after the launch of Windows 8.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Imagination Technologies designs the graphics processing for a wide range of mobile devices, including Apple’s iPhone 5. So an announcement from the British company today will have a considerable impact on how fast those devices run.

To save power and improve performance, Imagination Technologies will now optimize its graphics chip designs so that they can be manufactured in the best possible way at partners such as contract chip manufacturer Taiwan Semiconductor Manufacturing Co. It may sound very technical, but the change is a big one for the mobile computing world, including tablets and smartphones.

Imagination doesn’t design its own chips or manufacture them. It creates a subsection of a design, such as a graphics function, which other chip companies license and use in their own chips. Apple, for instance, licenses a graphics core from Imagination and incorporates that component within its A6 microprocessor for the iPhone 5.

Imagination usually gives a “synthesizable core,” or a ready-to-go finished design, to its chip licensee partners. The partners take that core and incorporate it in their chips and take it to a foundry partner, which makes the chip. The change now will be that Imagination will optimize its cores for a particular foundry’s factory, such as a 28-nanometer manufacturing line at TSMC, so that the resulting chip will be faster and use less power.

“We’re doing this because our customers are asking for it,” said Tony King-Smith (pictured), vice president of marketing at London-based Imagination Technologies, at a press briefing in San Jose, Calif. “They say they want a chip tuned to a particular foundry.”

King-Smith said the result would be faster and lower power chips, but he couldn’t quantify how much. By doing this kind of optimization, Imagination will be able to better compete with rivals (such as Intel) that own their own factories.

“This is happening now because we are so much in the center of horsepower in computing,” he said.

Designer of PowerVR graphics technology, Imagination Technologies isn’t well-known, but it competes with the likes of Nvidia, maker of the Tegra series of graphics-processor combo chips. Imagination has more than 40 licensees, including many of the top 20 semiconductor companies and system makers. Licensees include Apple, Intel, Sony, Samsung, Qualcomm, and others.

More than 60 chips using Imagination’s technology are in production, and another 76 are under design. Among the shipping chips are 17 mobile phone chips, 7 handheld chips, 15 home consumers, 8 mobile computing chips, 9 auto and 4 emerging markets chips. More than 500 million graphics chips have shipped to date with Imagination technology.

Imagination was founded in 1985 and has 1,200 employees in 14 countries.

Rayfield is reportedly joining another firm. Nvidia hasn’t announced the departure and hasn’t said who will replace Rayfield, who was the general manager of the mobile business unit that has produced three generations of Tegra mobile processors. The chips are the Santa Clara, Calif.-based company’s bridge from the PC graphics industry to mobile devices, which are seeing a much faster growth rate. Nvidia’s chips are better at running games and multimedia, and both are high-demand features in the most powerful smartphones and tablets.

Based on recent earnings, mobile has become critical to Nvidia’s future, and the company has had a significant number of design wins. But Apple uses its own chips in devices such as the iPhone and iPad, and that has limited Nvidia’s growth. Rayfield reported to Philip Carmack, who is the senior vice president of the mobile business, while Gary Hicok is the senior vice president of the Tegra mobile business in charge of partnerships.

[Update: Nvidia confirmed Rayfield's departure]

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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When Nvidia introduces a new graphics chip architecture like Kepler, it can launch a bunch of chips based on it. It does so by varying the amount of memory, pipelines, subprocessors, and pricing. So it’s no surprise that the world’s biggest stand-alone graphics chip maker is launching two new graphics processing units (GPUs) based on Kepler.

The GeForce GTX 660 is a midrange chip targeted at $229 graphics cards, while the low-end GeForce GTX 650 is targeted at $109 cards. At those price points, Santa Clara, Calif.-based Nvidia is quadrupling the performance compared to its prior offerings. For gamers, this means that games will look better on hardware that doesn’t cost an arm and a leg.

The cards are aimed at games that exploit Microsoft’s DirectX 11 graphics standard, including titles like Call of Duty: Black Ops, Assassin’s Creed III, and World of Warcraft: Mists of Pandaria. The GTX 660 is four times faster than the previous GeForce 9800 GT chip it replaces. The GTX 650 is eight times faster than the 9500 GTii.

The GTX 660 and GTX 650 are available from graphics card makers ASL, ASUS, Colorful, ECS, EVGA, Gainward, Galaxy, Gigabyte, Innovision 3D, Jetway, Leadtek, MSI, Palit, Point of View, PNY, Sparkle, and Zotac. Kenilworth, N.J.-based Maingear is announcing today that it will have a whole line of desktops that take advantage of the two chips, which are in the “sweet spot” for gamers in terms of performance, power efficiency, and affordability. That kind of broad industry support means that Kepler will likely make it into the mainstream PC in a big way.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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ARM, the British multinational semiconductor and software design firm, is announcing a graphics technology that could power a new generation of portable devices like tablets and smartphones with visuals that could rival game consoles such as Sony’s PlayStation 3 and Microsoft’s Xbox 360.

The technology is ARM’s new series of Arm Mali T600 designs, with anywhere from one to eight graphics computing cores, or brains. ARM develops the underlying architecture and the “cores,” or the basic blueprints of a chip, which its licensees fashion into chips for mobile devices. The new T600 designs will provide ammunition for scores of manufacturers to build ground-breaking portable machines.

The company’s hallmark is creating power-efficient chips that are used in billions of devices each year, making them ideal in smartphones or tablets where battery life is a premium.

The ARM Mali family is a graphics processing unit (GPU) that displays the visuals of devices such as smart TVs, smartphones, and tablets. The GPU can be used in a machine with an ARM central processing unit (CPU) and Khronos Group graphics processing software such as Open GL ES 3.0, which is also debuting today.

“You’ll see this result in faster devices with more fluid user interfaces,” said Steve Steele, senior product manager at ARM, in an interview with GamesBeat. “It can handle graphics with increasing complexity and resolution.”

Long a leader in CPU cores, ARM began creating its Mali graphics cores in 2007. ARM Mali T200 products are shipping now in about 70 percent of digital TVs, 20 percent of Android smartphones, and 50 percent of Android tablets. About 160 manufacturer devices are shipping. About 12 partners shipped 48 million units in 2011, and 25 are expected to ship more than 100 million in 2012.

The previous Mali T400 series was unveiled in November 2010, and products based on it will be coming out in the second half of 2012. Devices based on the T600 series (T624, T628, and T678) are likely to be out next year.

ARM has to keep a steady cadence of designs coming for its licensees to keep up with the rapid pace of mobile innovation. The Mali T600 designs will be able to handle graphics with resolution of 4K by 2K, or far more pixel density than today’s high-definition TVs. They will also have adaptive, scalable texture compression and a 50 percent increase in performance in the same given area as the prior chips.

ARM has a total of 63 Mali licensees and 51 company partners. It has 34 licensees for the Mali T400 and eight for the Mali T600.

The ARM technology competes against rivals designed by Nvidia, which makes the Tegra series of chips, and Imagination Technologies.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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When a graphics chip company exec changes jobs, it’s not usually a big news item. But Bob Feldstein’s move from Advanced Micro Devices to rival Nvidia is likely to set tongues wagging about the next-generation game console competition.

The Wall Street Journal reported that Feldstein left his job as vice president of strategic development at AMD on July 13 and reported for duty at Nvidia on July 16. Feldstein was critical to the design and production of AMD’s last generation of console graphics chips. He helped create the Xbox 360 graphics processing unit (GPU) and also worked with Nintendo on its Wii GPU.

AMD reportedly has won the deal to design graphics chips for Nintendo, Microsoft, and Sony. Nvidia confirmed that Feldstein had been hired to help the company with “current and possible future technology licensing projects.” Perhaps that means that Nvidia isn’t out of the running in getting its chips designed into next-generation game consoles. Feldstein spent two decades at AMD’s ATI graphics division. AMD recently reported weak earnings, and last year Rory Read replaced Dirk Meyer as CEO. Another key graphics executive, Rick Bergman, left in September.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Read made the statements in a conference call with analysts after the company reported earnings. AMD still generated a profit of $37 million in the quarter, and its graphics chip business performed seasonally well. But revenues were down 11 percent to $1.41 billion compared with a year ago. AMD is the second largest supplier of PC microprocessors, behind Intel. In after-hours trading, AMD stock is down 3.7 percent.

Read pledged the company has not changed its priorities and would “move forward confidently” and take steps to “transform our business.”

Read said, “After a reasonable start, we saw business velocity slow in the latter part of the quarter, driving this revenue miss.”

Desktop microprocessor sales in China and Europe were particularly weak, and an overall soft PC market impacted notebook computer chip sales. AMD quickly reduced its spending in the quarter, allowing it to keep gross margins the same at 46 percent.

AMD shipped too many of its Llano chips in the channel, and the sales of those chips stalled, resulting in higher inventory in the sales channel. There were too many motherboards in the market as well due to a mismatch in what was needed in the channel. AMD will be able to control this in the future, Read said.

“I believe we lost market share in the quarter,” Read said. “I don’t think there is any doubt about that.”

He was optimistic about the future due to the upcoming arrival of the Brazos 2.0 generation of chips and the arrival of the first “ultrathin” notebooks with AMD chips in them. AMD doubled its shipment of Trinity hybrid microprocessor-graphics chips (known as accelerated processing units, or APUs) during the quarter, and it is not supply constrained on those chips. Read is also looking forward to the launch of the Windows 8 operating system in the fourth quarter; Microsoft said it will introduce the operating system on Oct. 26.

Server business increased from a year ago but was below expectations. In graphics, Read said the company recaptured the title of having the world’s fastest graphics chip during the quarter and launched a number of new graphics chips for workstations. For the full year, Read said AMD processor unit sales would grow in the low single digits.

Read said AMD would continue to focus on low-power chips, disruptive server technology such as its Sea Micro server platform, and cloud-based computing.

AMD closed the quarter with 11,737 employees, compared with 11,599 a year earlier.

Nvidia’s business will grow thanks to growing acceptance of Tegra 3, a mobile processor that combines Nvidia’s high-end graphics with five computing brains. A leader in PC graphics, Nvidia has reinvented itself in the last five years to become a major player in mobile graphics chips. It competes with huge rivals such as Intel and Qualcomm, and it is holding its own on that front, Huang said.

“It stands to reason that because mobile and cloud computing are new paradigms, new computing paradigms would have to be invented,” Huang said. “There’s a new growth market in mobile.”

So far, Nvidia’s partners have shipped two phones with Tegra 3, including the HTC 1x and the Fujitsu Aero. This year, Nvidia expects that 30 Tegra designs will hit the market this year, compared to 15 last year, said Mike Rayfield (pictured), general manager of the Tegra business. In 2011, the Tegra 2 designs were used in 34 tablets and 67 smartphones. And that has generated a $400 million revenue business to date for Nvidia.

The Tegra 3 chip, which is five times more powerful in computing and three times more powerful in graphics than the

Nvidia has also just received AT&T’s certification for Nvidia’s LTE data modem chip. That means it could be used in phones that access AT&T’s LTE high-speed data network. That could help the company get off the ground in the U.S. market. The modem chips are built by Icera, a startup that Nvidia recently acquired.

Rayfield said that Tegra will be getting into sub-$300 tablets and smartphones. And the company is making progress in China. Rayfield said that five Tegra designs debuted in China last year, and 18 more will debut in China this year. Two carriers embraced Tegra phones in a big way last year, but dozens are expected to do so this year, Rayfield said.

Last week, Nvidia started talking about Kai, a mobile platform that could be the heart of an Android tablets that cost less than $199. And Nvidia has high hopes for Windows RT, the ARM-based software platform that Microsoft will release for tablet computers later this year. Those tablets are expected to give Apple a run for its money, finally.

“Mobility is going to be the most significant part of this new market,” Huang said. “These aren’t PCs. They don’t connect to printers. People don’t worry about that. It’s a different device from a PC.”

Nvidia had a tough time in the past quarter because it couldn’t get enough high-end 28-nanometer wafers from its contract chip manufacturers such as Taiwan Semiconductor Manufacturing Co. The demand for chips was there, but Nvidia couldn’t get enough chips out to meet that demand, Huang said.

Nvidia is pushing mobile apps that make use of its chips. The Tegra Zone on Android devices has been downloaded more than 3 million times. Rayfield also showed a cool-looking game dubbed Dark Meadow: The Pact working on a Tegra 3 device. It had high-end 3D graphics and realistic lighting and shadows.

By next year, Nvidia expects to launch two new chips: one code-named Wayne for the high end and another code-named Grey for the low end.

Nvidia announced today that it has created unique features in its Kepler-based graphics chips that could make cloud-based gaming much more practical. The company has also formed partnerships with companies such as Gaikai to make cloud games much cheaper and more appealing to gamers and maybe even eliminate the need to create a new generation of consoles.

That latter possibility may be a remote one for now, but the fact that it is possible suggests the potential disruption that could occur if Nvidia executes its vision for cloud gaming: Multi-brained graphics chips in data centers will be able to handle computing tasks for home players.

Jen-Hsun Huang, chief executive of graphics chip maker Nvidia, made the announcement today in his keynote speech today at the GPU Technology conference in San Jose, Calif. The cloud graphics announcement was one of several that Huang made today.

In an interview with GamesBeat, Nvidia senior vice president Dan Vivoli said Kepler-based graphics chips will be able to handle four times as many server-based games at the same time while using half the power and running at half the cost.

“The beauty of this approach is that GPUs will continue to improve all of the time,” said Vivoli. “Your hardware stays the same, but the data center hardware can be upgraded to handle better games.”

Game streaming companies such as OnLive, Gaikai, and Otoy have introduced cloud infrastructures in the past few years that enable users to play high-end games on low-end hardware. The serious computing is handled in the data center, and video is streamed to the user’s computer, where only a display is needed to view the game. Servers in the data centers can use high-end graphics cards to handle high-end games, but it usually takes one expensive graphics card to process one game being played by one user.

But with improved multitasking on Nvidia’s Kepler-based graphics chips, each data center server can handle multiple users at a lower cost. That makes cloud gaming more economical, Vivoli said.

The Kepler-based chips have also been designed to reduce the latency, or time it takes for an interaction between computers, for cloud gaming. That means that there won’t be a perceptible delay in playing cloud games.

“You might play a game in the cloud and have a better response time than the console,” Vivoli said. “Our architecture is so fast we can hide the latency of the network.”

Nvidia is partnering with Gaikai, which has 24 data centers in the U.S., to help reduce network latency. Nvidia is building a grid-based computing platform, dubbed Nvidia GeForce Grid, for Kepler-based machines to access. Together with cloud graphics software, the Nvidia GeForce Grid will be enable cloud-gaming companies to operate with lower operating costs, said Phil Eisler, general manager of cloud graphics at Nvidia.

At the conference, Nvidia and Gaikai demonstrated a virtual game console, consisting of an LG Cinema 3D Smart TV running a Gaikai application connected to a GeForce Grid GPU in a server 10 miles away. The demo showed it was possible to create instant, lag-free play on a highly complex PC game, with only an Ethernet cable and wireless universal serial bus game pad connected to the TV. The partners said they could stream a game to a user in less than 10 milliseconds. That means a user wouldn’t notice delays.

Time Sweeney, chief executive of Epic Games and a well-known graphics expert, said, “Cloud has the potential to deliver an even more powerful experience in the future by enabling ultra-high-end GPUs like the GeForce GTX 680 to stream ultra-high-quality graphics such as those made possible by Unreal Engine 4 to a huge range of devices, well beyond console capabilities. The result will be that more people can enjoy Epic’s games on more devices at higher quality.”

Cloud-based games have other benefits. Users can log into a game on one computer and continue playing on another.

“You will have the access to the latest and greatest GPUs (graphics processing units),” Vivoli said. “The question is what consoles will be in a few years. It becomes a lot easier to deal with piracy with cloud gaming.”

Vivoli said that the cloud-based graphics will create more disruption in the game industry, and they could enable new business models for game companies and console makers. You could, for instance, play high-end games on a TV that has no console hardware. Or you could play high-end games on an iPad that might not ordinarily be able to run them. Vivoli said this is the biggest change in graphics chips since Nvidia introduced the GeForce 256 graphics chip a decade ago and since the 2006 introduction of CUDA, which enabled graphics chips to perform general-purpose computing tasks.

Nvidia’s partners in the effort include Gaikai, OnLive, G-Cluster, Ubitus, and Playcast. Among server makers, Nvidia’s partners include HP, IBM, Amazon, Dell, Cisco, and Supermicro.

In addition to cloud graphics, Nvidia is announcing some other changes that will get more performance out of each GPU. With Hyper Q technology, Kepler-based GPUs will be able to handle 32 tasks at a time, compared to one task for the previous generation of Fermi graphics chips. Now it will be much easier to keep a GPU’s different cores busy.

Nvidia will also launch a feature called dynamic parallelism, which divides processing tasks into bite-sized chores that improve the efficiency of the processing. It enables better utilization of the GPU.

Nvidia will also release two new Tesla graphics cards (the K10 and K20) for high-end workstations. One of those, the K20, will go into the Oak Ridge National Laboratory’s Nvidia-based supercomputer.

The makers of virtualization software have been able to modify their software to virtualize graphics technology. Now, using Nvidia’s enterprise-focused Nvidia VGX platform, enterprise servers can use high-end graphics processing and allow enterprise clients to tap into that graphics power. Using virtualization software such as Citrix or Xen, the user can now access high-end graphics software using a low-end client. That enables a new kind of remote computing, where an engineer could access complex engineering drawings using an iPad.

“We’re now able to create enterprise level graphics or virtual graphics,” Vivoli said. “You can access enterprise software with your iMac at home, and it will run as if your machine was a Tesla workstation.”

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Revenues for the quarter were $924.9 million, down 4 percent from a year ago. Net income was $60.4 million, or 10 cents a share, compared with $135.2 million, or 22 cents a share a year ago. That’s a 55 percent drop.

But on an adjusted basis, Nvidia reported 16 cents a share. Analysts were expecting revenue of $915.7 million and 10 cents a share.

Many feared that a slowdown in PC sales and the continued hard drive shortage (due to last fall’s flooding in Thailand) would hurt Nvidia in the quarter. Nvidia is balancing its investment in its core business of making graphics chips for PCs with its expansion into the Tegra product line, or chips for mobile devices.

“Kepler graphics processing units (GPUs) are accelerating our business,” said Jen-Hsun Huang, president and chief executive officer of Nvidia, in a statement. “Our newly launched desktop products are winning some of the best reviews we’ve ever had. Notebook GPUs had a record quarter. And Tegra is on a growth track again, driven by great mobile device wins and the upcoming Windows on ARM launch.”

He added, “Graphics is more important than ever. Look for exciting news next week at the GPU Technology Conference as we reveal new ways that the GPU will enhance mobile and cloud computing.”

In the second fiscal quarter ending at the close of July, Nvidia forecasts revenues of $990 million to $1.05 billion. The company will make a 10-year, one-time donation to Stanford Hospital of $25 million.

“Nvidia had a solid quarter but its success was a bit hampered with TSMC’s lack of ability to ship the new Kepler architecture-based discrete graphics solutions,” said Patrick Moorhead, an analyst at Moor Insights & Strategy. “The good news for Nvidia is that they see a path to improved volumes and they have the architecture to beat, which will now be rolling into even higher margin and revenue Quadro and Tesla commercial designs.  I also believe Nvidia are being conservative on Windows RT volumes, but that is wise, given Microsoft’s lack of transparency on their plans.”

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A day after Intel launched its Ivy Bridge combo graphics-microprocessor chips, Advanced Micro Devices is launching a new series of fast and power-efficient graphics processing units (GPU) for notebook computers.

The new AMD Radeon HD 7900M, 7800M, and 7700M series are aimed at both high-end gamer laptops as well as thin media-rich laptops. The products are aimed at beating back competition from both Intel and Nvidia.

The new AMD GPUs use the “Graphics Core Next” architecture introduced last fall with the 40-nanometer 7000 series chips. But the new ones are more advanced and power efficient because they use a 28-nanometer manufacturing process; i.e., the circuits are a mere 28 nanometers apart. (A nanometer is a billionth of a meter.)

The improvements in the manufacturing process and design that come with the new GPUs will enable video game graphics that run much faster than the previous generation of mobile graphics chips. AMD says that the HD7970M can run Deus Ex: Human Revolution 16 percent faster than Nvidia’s GTX675M. That’s not much. But it also says that it can run Aliens vs. Predator (2010) as much as 76 percent faster than the Nvidia chip based on benchmarks provided by AMD.

They also feature AMD App Acceleration, which means that non-graphics computer applications will be able to run faster. And they are more power efficient thanks to features such as AMD Enduro technology, AMD Powergate, and AMD ZeroCore technology.

“We’re bringing a lot of innovation to notebook computers,” said Ogi Brkic, an AMD product manager.

The high-end 7900M graphics chip has 1,280 components known as stream processors. It runs at 850 megahertz and can compute 2,176 gigaflops (a measure of math-intensive performance). The chip can power as many as six displays. The 7900M is shipping now. The 7800M graphics chip has 640 stream processors, runs at 800 megahertz, and can compute at 864 gigaflops. And the low-end 7700M graphics chip has 512 stream processors, runs at 675 megahertz, and can compute 589 gigaflops.

The AMD Enduro technology is like Nvidia’s Optimus. It switches between the processor’s integrated graphics or a discrete graphics chip, depending on the graphics task at hand. The AMD Powergate technology shuts down parts of the graphics chip when they are not in use, reducing static screen power by 34 percent. The ZeroCore technology turns off a lot of functions in the graphics chip when the core is idle. It also controls additional graphics chips in the system and consumes less power as needed. ZeroCore reduces idle power consumption by 86 percent.

Intel launched its Ivy Bridge microprocessors on Monday, and computer makers are announcing a bunch of systems that combine Ivy Bridge and graphics chips from AMD’s arch rival, Nvidia. Toshiba and Alienware have combined both Nvidia GeForce 600M graphics chips and Intel Ivy Bridge processors in new systems. Both of those systems were built from the ground up for performance and power efficiency. Alienware has announced a new laptop with the AMD chips, and more are expected soon.

Nvidia says it expects to garner the lion’s share of Intel Ivy Bridge notebooks with discrete graphics chips. Of course, some computer makers will simply use Ivy Bridge chips, which combine decent graphics and a microprocessor on the same chip, as the only major computing chip in stripped-down laptops or Ultrabooks. In that kind of scenario, both AMD graphics and Nvidia lose out.

AMD is now ramping up its production of its code-named Trinity processors, which are expected to compete head-on with Intel’s Ivy Bridge chips. As you can see, the competition has become multi-dimensional in the processor-graphics market.

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With the debut of  its code-named Kepler project, Nvidia is retaking the crown today as the creator of the world’s fastest graphics chip. Most people may not care about that, but hardcore gamers who play the latest games will be happy.

The new chips will take PC technology a leap forward as the chips make their way into new gamer desktops and other high-end machines. Nvidia paid a lot of attention to balancing the system’s power efficiency, so new computers based on the machine will not only be fast, they’ll be more power efficient, will fit in a smaller space, and will operate more quietly.

The next-generation chip is called the GeForce GTX 680 and is the result of 1.8 million man-hours of work over five years. With this chip, Nvidia reclaims the fastest-graphics-chip title from Advanced Micro Devices’ code-named Tahiti chip, formally known as the AMD Radeon HD 7970, analysts say. The 680 is just one of several new models of chips based on the Kepler architecture. Already, new laptops are being introduced with Kepler-based notebook graphics chips, dubbed GeForce GT 640M.

As an example, a single graphics card with the new chip can run Epic Games’ high-end game demo, Samaritan, without any visible flaws, Nvidia’s Justin Walker, senior GeForce product manager, told VentureBeat that. And it can do so using a power supply that consumes 195 watts. Last year, it took three Fermi-based GeForce GTX 580 graphics cards running on a power supply with 730 watts to run the same demo.

“This is the fastest and most efficient GPU (graphics processing unit) ever built,” Walker said. “It’s a game changer for us.”

The combination of performance and power efficiency means that Nvidia will likely score a lot of wins in Ultrabooks, the Intel-based laptops that are thin like the MacBook Air but affordable and fast. Nvidia’s new GeForce 600M series of Kepler-based graphics chips will be used in the notebook computers. Both the desktop chips and the laptop chips are available now. And the days of loud fans or exotic power supplies may be numbered. The 600M series will likely be used in Ultrabooks with Intel’s upcoming Ivy Bridge processor.

Rene Haas, general manager of Nvidia’s notebook graphics division, said that, contrary to popular belief, laptops with standalone graphics chips are not disappearing despite the introduction of combo microprocessor-graphics chips from Intel and AMD. In 2011, computer makers shipped 75 million laptops with standalone graphics, Haas said. Nvidia has four mobile chips in the 600M family: the GeForce 640M, the 620M, the 660M, and the 675M. Laptops with those chips will be able to play all of the top 30 PC games, Haas said.

Patrick Moorhead, analyst at Moor Insights and Strategy, said that up until this point it was tough to get discrete graphics chips into Ultrabooks because of the power constraints. ”Kepler decreased power by half at the same performance point and also enables sophisticated power sharing between CPU (central processing unit) and GPU,” he said.

The previous GeForce GTX 580 had a total of 512 cores, with 32 streaming multiprocessors in each core. The 680 has 192 streaming multiprocessors in each core and eight cores altogether, for a total of 1,536 cores. Full told, the 680 has more than 3.5 billion transistors, the basic components of electronics, compared to 3 billion in Fermi.

Kepler can run three high-definition monitors in stereoscopic 3D, whereas it took two Fermi boards to do the same thing. AMD’s graphics chip can run six screens at the same time, but Nvidia’s Walker said the only time six screens is useful is at a trade show. Gamers don’t want to play with six screens because the bezels between the screens are too disruptive, he said.

Kepler chips are based on the 28-nanometer process at Taiwan Semiconductor Manufacturing Co. That compares to 40-nanometer technology used in the previous generation Fermi chips, which debuted in March 2010. Nvidia said that the 680 is 300 percent faster in DirectX 11 tessellation performance and 43 percent faster than AMD’s Radeon HD 7970 in cutting-edge games such as Elder Scrolls V: Skyrim. Many games run about 20 percent faster.

Walker said the 680 has twice the performance per watt of the GeForce GTX 580. The 680 also has some new technologies, including a “streaming multiprocessor block,” known as SMX, that is more power efficient. The new FXAA and TXAA antialiasing technologies help get rid of the jaggies, or jagged diagonal lines in games. And they do so without slowing the overall speed of the graphics chip as much as in the past. The 680 can also now run 3D Vision, Nvidia’s stereoscopic 3D solution, in a single graphics card.

Kelt Reeves, president of Falcon Northwest, a maker of high-end gaming systems, said,“The GTX 680 lays down what should be whiplash-inducing speed at the sound of a whisper. Even at full throttle, it doesn’t heat up. In the immortal words of Obi-Wan describing a lightsaber, it’s ‘an elegant weapon for a more civilized age.’”

Mark Rein, vice president of Epic Games, said he used a GTX 680 to demo a preview of the Unreal Engine 4 for select developers at the recent Game Developers Conference in San Francisco. Manufacturers making graphics cards with the 680 include ASL, Asus, Coloful, ECS, EVGA, Gainward, Galaxy, Gigabyte, Innovision 3D, Jetway, Leadtek, MSI, Palit, Point of View, PNY, Sparkle, and Zotac. The cards will sell for $499. Computer makers shipping laptops with the new chips include Acer, Asus, Dell, HP, Lenovo, LG, Samsung, Sony, and Toshiba.

An Acer Timeline Ultra M3 laptop uses the GTX 640M graphics chip, and it weighs 5 pounds, is 20 millimeters thick, and has an eight-hour battery life. By comparison, in March 2010, you could buy an Alienware laptop with a GeForce GTX 285 that weighed nine pounds, was 50 millimeters thick, and had three hours of battery life.

Nathan Brookwood, analyst at Insight 64, said, “No doubt about it, Nvidia has reclaimed the single-chip performance crown. The high-end is a small niche with big bragging rights. The challenge will be to move the new technology to mainstream price points.”

Jon Peddie, analyst at Jon Peddie Research, said the bragging rights for having the fastest graphics chip are always fleeting. But he is impressed with how much faster Kepler is than the older Fermi chips.

The world’s biggest maker of stand-alone graphics chips for PCs has been benefiting from a boom in high-end gamer PC sales at the same time that it is pivoting into the mobile processor market with its line of Tegra processors.

The company said revenue grew to $953.2 million, up 7.5 percent from $886.4 million a year earlier. Net income was $116.0 million, or 19 cents a share, compared to $171.7 million, or 29 cents a share, a year ago. Non-GAAP earnings were $158.1 million, or 26 cents a share, compared with $142.4 million, or 24 cents a share a year ago. Analysts were expecting non-GAAP revenues of $950.5 million and earnings per share of 19 cents.

While Nvidia beat that target, the company lowered its fourth fiscal quarter revenue expectations to $900 million from $930 million, down from prior guidance. Gross profit margins will be 49.2 percent, plus or minus 1 percentage point. Part of the problem is the hard drive shortage that is curtailing PC production, but another problem is yields on the newest generation of graphics chips.

For the year, revenue was $4.0 billion, up 12.8 percent over the previous fiscal year. GAAP gross margin for the year was 51.4 percent, up 11.6 percentage points. Non-GAAP gross margin was 51.9 percent, up 6.8 percentage points. Nvidia’s stock has fallen in after-hours trading about 4.45 percent to $15.45 a share.

Nvidia has a tough balancing act. The PC market has slowed because of the growth of the smartphone and tablet market, but chips for PCs still command a higher value. In that market, Nvidia has to race ahead on graphics to compete with Intel and Advanced Micro Devices, which are both combining graphics and processors on a single chip.

In the mobile market, Nvidia is competing against a larger group of players, such as Qualcomm. Nvidia is in the midst of launching its Tegra 3 smartphone and tablet chip. It hopes to set itself apart with a focus on heavy-duty graphics and quad-core processing. Nvidia is also targeting the PC processor market since Windows 8 will run on both ARM-based and Intel-based chips when it comes out later this year.

“We have established our position in the mobile market,” Jen-Hsun Huang, chief executive of Santa Clara, Calif.-based Nvidia, in a conference call with analysts. In 2011, earlier Tegra chips shipped in 14 phones, 34 tablet computers, and with 18 of the top 20 carriers. Tegra 2 was the first chip with dual cores, or processing brains.

Meanwhile, Nvidia said two major supercomputers will be using Nvidia’s Tesla family of graphics processors for the enterprise. Nvidia plans to announce its first Tegra 3 phones at the Mobile World Congress event in Spain.

While the hard drive shortage will clear up by the end of the first half, new challenges will arise for Nvidia, said Patrick Moorehead, an analyst and president of Moor Insights & Strategy. One problem is Ultrabooks, the Intel-sponsored thin laptops that will use powerful chips but are unlikely to use separate chips for graphics, Moorehead said. The other challenge is competition from Qualcomm, which is readying a new version of its Snapdragon chips for later in the year.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Advanced Micro Devices is rolling out new graphics chips today that will bring screaming performance to the mid-range of the gamer PC market. The new AMD Radeon HD 7700 series (code-named Cape Verde) has a lot of the same technology as AMD’s code-named Tahiti graphics chip, which debuted in December as the world’s fastest graphics chip. But the 1-gigahertz-capable 7700 chips will be built into graphics add-on cards that cost only $99 to $199.

That means it won’t cost an insane amount of money to buy a gamer PC that can run a lot of the latest computer games. And that will give Sunnyvale, Calif.-based AMD a leg up on graphics chip rival Nvidia for a time.

The new chips will replace the 5770 series chips from last year and will run most games about 20 percent to 30 percent better than the earlier chips. The new chips can also run Battlefield 3, one of the most demanding games available on the PC, almost 30 percent faster than Nvidia’s GeForce GTX 550 Ti graphics chip, said Arturo Wong Chujoy, product marketing manager at AMD in an interview. The HD 5770 series chips were the most successful modern graphics chips (running Microsoft’s DirectX 11 graphics technology) to date, based on hardware surveys conducted by Valve’s Steam service, Wong Chujoy said.

Each of the new 7700 series chips has 1.5 million transistors and is less than half the size of the more powerful Tahiti chips. The 7700 series chips normally run at 75 watts but can power down to less than 3 watts of power consumption when the computer isn’t being used. The chips are built with AMD’s new 28-nanometer manufacturing process. The chip has 640 stream processors that handle graphics tasks, compared to 2,048 stream processors in the AMD Radeon HD 7970 high-end model. But Wong Chujoy said that the new models have a lot of high-end features, such as the Eyefinity 2.0 technology that allows one chip to power six displays.

The 7700 series Gigahertz edition has “reference engine clock” that runs at 1 gigahertz. That means that most of the chip operates at that speed, making the chip the first in the world to run at such a rate, Wong Chujoy said. He also said the chips can be “overclocked,” or run at a higher than recommended speed. An 800-megahertz version can be overclocked to 900 megahertz, and the 1 gigahertz version can be overclocked to 1.25 gigahertz. The 7770 model will sell at $159, and the 7750 will sell for at $109.

The Cape Verde chips will be available today from a wide range of game-focused hardware companies, from MSi to Asus. Starting in March, another set of graphics chips code-named Pitcairn will arrive and replace AMD’s Radeon HD 6800 series of chips in the price points ranging from $199 to $399.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The Sunnyvale, Calif.-based chip maker said the code-named Southern Islands chips use a revolutionary new architecture that the company has been working on for five or six years. Dubbed “Graphics Core Next,” the architecture takes AMD’s graphics chips into the 28-nanometer generation of chip manufacturing process. That process enables AMD to put 4.3 billion transistors, or basic computing components, on a single chip. This kind of announcement makes PC gamers salivate.

If you take a game like Battlefield 3 and play it on a computer with three monitors, you will get a smoother experience than previous generation of graphics chips, said Devon Nekechuk, product manager at AMD, in a press briefing.

He said that the chip runs about 30 percent faster on the 3D Mark 11 Extreme benchmark test compared to Nvidia’s GeForce GTX 580 graphics chip. Gamers still want these kinds of chips, as do consumers who use big displays or multiple displays for high-end PC work. The chips will feed the $15 billion PC gaming ecosystem, which needs better hardware to run high-end games like Battlefield 3.

The graphics chip family will be known as the AMD Radeon HD 7900 series of chips and it will include the AMD Radeon HD 7970, the first coming to the market on Jan. 9. The chip has 2,048 stream processors based on the Graphics Core Next architecture. It can support as many as six monitors at the same time and can use 3 gigabytes of graphics memory, dubbed 3GB GDDR5/384-bit. It consumes about 300 watts, though will operate on a lot less than that. Still, it is enough to require an improved fan design and a sophisticated heat sink to cool off the chip during operation. At a static level, the 7970 will consume 15 watts of power.

AMD says the boards being launched with the graphics chips can be overclocked, or turned up beyond specifications, to over 1 gigahertz operation.

“There is a lot of overclocking headroom on this chip,” said Nekechuk. “The enthusiasts will really appreciate that.”

The family has three versions coming in the near future. The Tahiti (under the Southern Islands code name umbrella) is going to be called the AMD Radeon HD 7970 and it will be the world’s fastest graphics chip. Other lesser chips include Pitcairn and Cape Verde.

The new graphics cards (pictured at top) using the chip have a “long idle” feature that allows them to turn off power when the display is not in use. The new chip also supports Digital Discrete Multipoint, (DDM), an audio feature that embeds surround sound into each display when you are using as many as six displays. That makes for better surround sound capability.

It will be interesting to see if Nvidia, which has a press conference at the Consumer Electronics Show, can match AMD’s performance anytime soon. AMD said about 600 gaming titles support the graphics chip. Each Tahiti chip has 32 Graphics Core Next cores.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Nvidia is forging ahead with its plans to revolutionize supercomputers and workstations with a number of announcements today. Among them, the Barcelona Supercomputing Center will be the first in the world to adopt a solution that combines Nvidia’s low-power ARM-based Tegra central processing units (CPUs) with Nvidia’s graphics processing units (GPUs).

That combination could be a powerful way to improve computing power without consuming a lot of electricity. Power consumption and the electricity costs that go with it are now the No. 1 cost for maintaining supercomputers these days. Until now, Nvidia’s Tegra CPUs were used as mobile device processors, and most supercomputers used Intel microprocessors.

The supercomputers will use the hybrid architecture that combines the speedy serial (one thing after another) processing nature of CPUs with the parallel (many small tasks at once) nature of GPUs. The Barcelona Supercomputing Center plans to improve its energy efficiency by two to five times, according to the announcement today at the SC11 supercomputing conference in Seattle.

Of course, Nvidia is a long way from knocking Intel out of supercomputers in the big picture. Intel has 64-bit processors while Nvidia doesn’t and that’s an important feature for high-end computers. Intel is also using its manufacturing advantages to race ahead with low-power server chips, and it is starting initiatives to use low-power Atom chips in microservers.

The GPUs take advantage of Nvidia’s Cuda programming environment to perform non-graphics computing tasks on a GPU. The Barcelona center ultimately plans to deliver exascale-level performance while using 15 to 30 times less power than current supercomputers. Nvidia is the world’s largest independent graphics chip maker, but it has recently made headway in the processor market with its ARM-based Tegra CPUs.

An exascale supercomputer will, at some point in the future, be able to execute an exaflop. That is a billion billion floating point operations per second. A flop is the equivalent of taking two 15-digit numbers and multiplying them together. Right now, supercomputers such as the upcoming Titan machine at the Oak Ridge National Laboratory are targeting computation levels at 20 petaflops. A thousand petaflops is equal to one exaflop. So supercomputers have a long way to go to get to exascale.

Alex Ramirez, leader of Barcelona’s Mont-Blanc Project, said that CPUs alone often consume the lion’s share of the energy — 40 percent or more — in a supercoputer. By comparison, he said the Mont-Blanc machine will use the Tegra mobile processors to achieve a four to 10-fold improvement in energy efficiency by 2014.

Nvidia will create a new hardware and software development kit to enable more ARM-based supercomputing initiatives. The Barcelona version will feature a quad-core Nvidia Tegra 3 ARM-based CPU along with an Nvidia GPU. The center is starting with 256 Tegra CPUs and 256 GPUs. The kit will be available in the first half of 2012. Nvidia is naming the Barcelona center a Cuda “center of excellence,” the 14th such institute.

Nvidia is also introducing its Maximus circuit cards (pictured right) for advanced workstations. The Maximus technology can be used to design fancy cars and other high-computation tasks that normal PCs can’t handle. The Maximus cards will combine graphics and computation in the same system. The Maximus technology combines Nvidia’s Quadro professional workstation GPUs with Nvidia Tesla C2075 companion processors (which are separate computing cards).

Previous workstations forced designers and engineers to do compute-based and graphics-based work separately or offline. Now, with Maximus, they can do both of those kinds of tasks at the same time on the same machine, said Jeff Brown, general manager of Nvidia’s professional solutions group. The workstations will speed up science, engineering and design applications from Adobe, Ansys, Autodesk, Bunkspeed, Dassault Systèmes and MathWorks.

Meanwhile, Nvidia has joined with Cray, the Portland Group, and Caps to create a new standard for parallel programming known as OpenACC. That will make it easier to accelerate applications that use both CPUs and GPUs. The OpenACC should benefit programmers working in chemistry, biology, physics, data analytics, weather and climate, intelligence, and other fields. Initial support for OpenACC is expected to be available in the first quarter of 2012.

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It seems so mundane to introduce PC chips at a time when competitors Intel and Nvidia are racing off into smartphone, tablet and “ultrabook” (thin laptops) chips. Hewlett-Packard said last week that its PC business might be put up for sale, in part because tablet demand was hurting PC sales. AMD makes chips for laptops with larger screens and more performance, but not for tablets and smartphones. That distinction may not seem like a huge one, but it is.

“From a supplier point of view, those are very different markets,” said Nigel Dessau (pictured), chief marketing officer at Sunnyvale, Calif.-based AMD, in a recent interview. “We will focus on the ultra thin-and-light laptops, but not the smartphones and tablets for now.”

It’s worth noting that roughly 360 million PCs are expected to be sold this year, so the unfashionable market is nevertheless a huge one.

Complicating things for AMD is the fact that it is operating without a chief executive. Dirk Meyer, the former CEO, left in January after a dispute with the board about AMD’s direction. Chief financial officer Thomas Seifert is interim CEO and the search for a new CEO is being headed by AMD chairman Bruce Claflin. AMD has yet to say when it will bring on a new boss.

In its second quarter earnings conference call, AMD called attention to its graphics chip business. Those chips are being used to create visual experiences outside of the PC business. AMD’s graphics will be used in Nintendo’s upcoming Wii U console. AMD chips are already used in the Nintendo Wii and the Microsoft Xbox 360. It’s a big market: Roughly 120 million game consoles are expected to ship in the next three years.

AMD is also focused on reducing the power consumed by its chips — an area where Intel has been leading the charge in the PC market, although ARM-based rivals have an edge on Intel in the smartphone and tablet markets.

“When it comes to power, we get it,” Dessau said.

Today’s new chips are extensions to AMD’s Fusion accelerated processing units (APUs) which combine graphics and a microprocessor in a single chip. The C series and E series chips are targeted at thin notebook computers, netbooks, all-in-one desktops, and stand-alone desktop PCs as well. For consumers, the new chips will deliver PCs that can handle streaming video well, display sharp photos, and play lifelike 3D games.

The new chips deliver better high-definition graphics, overall performance, more efficient memory, and better power efficiency. Laptops that use the chips could get about a four-hour improvement, boosting resting battery life to 12 hours (on the C series chips). Resting battery life refers to how long a single charge lasts when a laptop is turned on but not actively computing. A number of computer makers are shipping computers with the new chips starting today.

AMD said it has shipped more than 12 million APUs and sold more than five million C series and E series APUs in the second quarter.

As for tablet computers, Dessau said, “I’m not convinced there is a tablet market yet. I know there is an iPad market.” AMD can’t make chips for iPads since Apple designs those chips itself.

“The tablet and smartphone markets are already very crowded,” Dessau said. “No one really wants to run a DX11 (with high-end PC graphics) game on a smartphone for yet. So for us, there isn’t a good differentiated value proposition yet. People ask us why we don’t get into the smartphone business. With eight or nine competitors there, why would we want to get into the smartphone business?”

At some point, after Microsoft’s Windows 8 operating ships (as early as 2012), then AMD might have a better value proposition, Dessau said. Windows 8 is expected to be able to run on both PCs and tablets. Of course, AMD will face new competition when rivals such as Nvidia, Qualcomm and other ARM-based chip vendors come into the Windows 8 market.

For 2012, AMD plans to introduce a Fusion chip, dubbed Trinity, in the notebook market. That chip will consume less than half the power of today’s lowest-power 35-watt Llano-based APU. By 2013, AMD said it plans to introduced an APU that is even further optimized for tablet devices than its current line-up of portable chips.

“We’ve had a lot of work on the strategy side, but it makes sense to wait until the new CEO comes on board before we describe it,” Dessau said. “We’ve not been sitting still. Since chips have a long lead time, any product we introduce this year was planned 2.5 years ago. Now we’re deciding what kind of products to put out in 2014.”