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Nvidia to cut GeForce prices by up to 38%

Tough competition, demand downturn behind it all

Nvidia plans to cut the price of its GeForce 3 graphics chip to ensure add-in cards based on its next-generation accelerator sell for around $399 - significantly less than the $599 the company had originally specified.

The prices of other chips will be cut too, taking some low-end board prices down to around $99. Like as not, they'll be based on the GeForce 2 MX 200. Boards based on the GeForce 2 MX 400 should starts at $129.

GeForce 2 Ultra-based boards should come in at around $299.

Nvidia's motivation here? Several reasons spring to mind, but the main contender has to be the state of the PC market. The downturn has hit demand, and that in turn has had a negative effect on PC makers' requirements for components as they not only need fewer parts but look for ancillary parts, like graphics chips, that offer more performance for a lower price.

A case in point is STMicroelectronics' cheap Kyro II, which seems to have severely rattled Nvidia. The graphics specialist is sufficiently worried it had to put out a document dissing the rival part rather than rely on the GeForce 2 MX's technological advantages (see Nvidia disses chip rival in secret document).

Meanwhile, we hear that Taiwanese board makers have continued to focus on the old GeForce 2 MX - rather than the newer MX 200 and MX 400 varieties - in order to shift stock. The price cuts may persuade them to start pushing product based on the more recent parts a little more aggressively.

The MX 200 is slower than its predecessor - thanks to its 64-bit SDRAM memory bus (the original MX also supports 128-bit SDRAM and 64-bit DDR SDRAM) - and that can't have helped either. Vendors have had a job deciding where to price boards based on the new part in relation to those based on the old one. Again, the new price cuts may clarify their thought processes.

At the high end, the GeForce 3's original price was very widely criticised by hard-core graphics buffs - the part's core customer base - so some shift was perhaps inevitable.

Nvidia's production partner, TSMC, began volume production of the GeForce 3 at the end of March using a 0.15 micron process. The price cut suggests too that TSMC's yields are proving rather higher than both companies originally estimated. Given that the GeForce 3 is also the basis for Microsoft's Xbox, the chip's production volumes are probably high enough for yield improvements to come through fairly quickly. ®

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