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Tipping the see-saw battle yet again in the battle for the hearts of hardcore PC gamers, Advanced Micro Devices is announcing a PC graphics solution which will take the single-card graphics speed crown away from Nvidia.

The $549  graphics solution — the ATI Radeon HD 4870 X2 — combines two graphics chips on a single PC add-in card with relatively low power consumption. It also has a lower performance ATI Radeon HD 4850 X2 card. The products will appeal to hardcore gamers, a small but influential slice of the market. The see-saw tips with each new announcement. More important, it appears that, for the first time in years, AMD may have thought smarter than its arch rival.

“We call it out sweet spot strategy,” said Rick Bergman, senior vice president at AMD in Sunnyvale, Calif., and general manager of the graphics products group. “It’s our attempt to shift the playing field.”

The new 4870 X2 card can compute 2.4 teraflops, a measure of its raw computing speed. That’s more than twice the speed of Nvidia’s high-end single-chip graphics chip, the Nvidia GTX 280 at 0.93 teraflops. Through its SLi solution — where Nvidia links two graphics cards in a computer — Nvidia can also put two graphics cards with one 280 each in a system. But in the same vein, AMD could put two 4870 X2s in a system, giving it an advantage of having four graphics chips to Nvidia’s two. (Nvidia takes the crown back if you want to put three cards in a system). Few gamers would pay for such expensive solutions, but this is about bragging rights at the very high end.

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The bigger problem for Nvidia is that AMD shot for a smaller chip with slightly lower performance but much lower costs and much lower power consumption. It can thus price its chips lower than Nvidia across the product line, from high end to low end. It did so in part by being more aggressive with its manufacturing technology — which gives it an edge in miniaturization — by using 55 nanometer technology while Nvidia used 65 nanometers. (In this case, the smaller number is more advanced).

JoAnne Feeney, an analyst FTN Midwest Securities, believes that AMD is in the midst of taking market share away from Nvidia in a variety of product lines. Since Nvidia launched its flagship GeForce GTX 280, the company has had to cut its prices about 29 percent, while the single-chip ATI Radeon 4870 chip has fallen only 8 percent.

AMD’s ATI Radeon HD 4850 and 4870 chips launched in June and received fairly wide acclaim in comparision to the Nvidia GeForce GTX 280, which launched at the same time. That’s reflected in gains AMD has made in high-end game PC machines such as Hewlett-Packard’s VoodooPC, Falcon Northwest and Dell’s Alienware. And the newest X2 products are getting great reviews too.

“After what ATI pulled off (in June), I’m not counting them out of any race,” said Kelt Reeves, founder of Falcon Northwest.

Nvidia is pushing non-performance features, such as its CUDA programming language that allows the graphics chip to be used to handle general-purpose functions, and its physics technology for creating more realistic movement in games.

Tony Tamasi, a senior vice president at Nvidia, said that AMD’s strategy of putting two chips on a board has its trade-offs. Those two chips both have to have their own frame buffers, or memory systems. He notes that the performance doesn’t scale up as efficiently as possible and so it remains possible for one big chip to outperform two mid-range chips. AMD did include a port for communication between the graphics chips, but that doesn’t create big gains in efficiency.

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