ATI's CEO: Graphics chips are real computer brains

JEREZ IS a city in ferment, and it's not just the fact it's packed with ATI distributors, graphics card partners and the press that is the reason.

The city that gave its name to sherry, in Andalucia, is building, building and building again. Holiday apartments, offices, Sherry Theme Parks - no really - and so many banks it's hard to find a shop.

Nevertheless, and notwithstanding this building frenzy, Jerez also saw unassuming but dead smart ATI CEO Dave Orton flit between the hacks, its customers and their customers, the distributors. This is a complex chain, but ex-SGI employee Orton seems in little doubt about the future.

Of course, Orton find himself head to head against renowned Nvidia egotist Jen Hsen, the CEO of Nvidia - the contrast between the two could not be more different.

First off, Orton denies the rumours - spawned at E3 - that ATI is up for grabs by Intel. Indeed, and as you'd expect, Intel and ATI are constantly talking to each other. Orton told the INQ that was natural because the PC ecosystem and the churn demands that. The chipset business is important to ATI, and Intel and his firm are natural partners.

Orton took the time to explain how the PC market works, rather patiently, we thought. "ATI will bring out a major gamer's card every six months," he said. But ATI can go faster than Moore's Law, he added. OEMs want to grow the market and create churn.

ATI's model is that its top two chips have to turn over every six months through their journey via the channel, but that's not the whole story. His firm does make money from high-end chips, but there's a baseline where ATI also makes lots of money by feeding the non-gamers in the equation.

At this point, Dave Orton borrowed a couple of pages from another reporter's notebook, and started to talk about how the technology his firm makes far exceeded the basic human intellect.

He was responding to former Intel exec Bob Colwell's famous jibe that the graphics processor business was limited by the ability of the eye and the brain behind the eye.

Orton said his company called this "eye-limiting resolution". He admitted there will be a point in the future where the brain won't be able to process all the data it gets from its eyes. "We've still got a lot of headroom in terms of screen resolution," he said. He explained that the eyes, being directly linked to the brain, take in a lot more than the other four senses. The brain does the processing, but so much information is absorbed, that sometimes it's hard for a CPU to process it.

The proof of this, Orton reckons, is that every time you show a customer the advantage of the next generation, in front of a PC, she or he immediately registers the difference, seeing as the eye is connected to the brain.

Orton was frank about the future of PCs and also talked about the business dynamics of the Canadian firm.

He said: "In 2000 we thought consumer business would be 50 per cent of its business but the PC business grew." ATI doubled it to two billion dollars, although it was projected far lower. ATI's consumer business is growing 50 to 100 per cent a year, but from a small base, he said.

In two year's time, the digital consumer business could be a third of ATI's revenue, he claimed. And phones? He reckons the phone will be a personal media device "for a class of the clientele". It is unlikely, however, that it will be a creation device because of the limitations of screen size.

ATI is getting a bit tired of shows like E3, CES, Computex, CeBIT and the rest, he said. The cost of attending such shows is very high, and "if money was no object" ATI would be at all those shows. But shareholders demand return on investment, and meetings at such shows are preferable to sinking money into branding exercises that may not possible turn into sales.

Plus, the Internet has changed everything about trade shows, he said.