The following article appears courtesy of Stuart Weinberg / DOW JONES NEWSWIRES / Yahoo Finance TORONTO (Dow Jones)--ATI Technologies Inc. scored a large design win at the expense of arch-rival Nvidia Corp. (NasdaqNM:NVDA - News) , according to an analyst report Friday. "We have learned that Nvidia has lost a large design win at Micro-Star Inc., one of its largest customers," Friedman Billings Ramsey analyst Eric Rothdeutsch said in the note. The design win was for products produced for Medion, a German retailer, Rothdeutsch said, adding that he believes other Nvidia designs at Micro-Star are at risk, as Micro-Star had been an exclusive Nvidia customer.
Rothdeutsch also said he believes Nvidia's new GeForce FX family will ramp up more slowly than expected due to "low yields" on both discrete and board-level products. All add-in-board partners are going after the best technology available in the market and we are gaining business in many different places," said Paul Ayscough, head of corporate marketing at ATI Technologies. He doesn't own any ATI shares and Friedman Billings doesn't haven an investment-banking relationship with ATI. Officials from ATI and Nvidia officials weren't immediately available for comment. Micro-Star Inc. chose ATI Technologies Inc. instead of Nvidia Corp. because it appears that Medion - the German retailer that will be using Micro-Star's ATI-equipped products - wanted ATI's Radeon 9500 chips for its Spring sales promotion, Friedman Billings Ramsey analyst Eric Rothdeutsch said. Rothdeutsch said he believes Medion will also request ATI chips for its Fall promotion. If that occurs, the analyst said he believes Nvidia, Santa Clara, Calif., could lose as much as $30 million in sales this year. Furthermore, now that it has a relationship with ATI, Micro-Star could choose the Toronto graphics chip maker for other designs, hurting Nvidia's sales even more, he said. "Up to now, Micro-Star has used Nvidia in 100% of its graphics cards," Rothdeutsch said. "This loss may open the door wider to ATI and place other design wins at Micro-Star at risk for Nvidia." Rothdeutsch cut his full-year 2004 revenue and share earnings estimates for Nvidia to $1.8 billion and 61 cents, respectively. His previous estimates were for $1.83 billion and 63 cents, respectively. He maintained his market perform rating and $11 target. Rothdeutsch doesn't own any Nvidia shares and Friedman Billings doesn't have an investment banking relationship with Nvidia. Source: Biz.Yahoo.com
Rothdeutsch also said he believes Nvidia's new GeForce FX family will ramp up more slowly than expected due to "low yields" on both discrete and board-level products. All add-in-board partners are going after the best technology available in the market and we are gaining business in many different places," said Paul Ayscough, head of corporate marketing at ATI Technologies. He doesn't own any ATI shares and Friedman Billings doesn't haven an investment-banking relationship with ATI. Officials from ATI and Nvidia officials weren't immediately available for comment. Micro-Star Inc. chose ATI Technologies Inc. instead of Nvidia Corp. because it appears that Medion - the German retailer that will be using Micro-Star's ATI-equipped products - wanted ATI's Radeon 9500 chips for its Spring sales promotion, Friedman Billings Ramsey analyst Eric Rothdeutsch said. Rothdeutsch said he believes Medion will also request ATI chips for its Fall promotion. If that occurs, the analyst said he believes Nvidia, Santa Clara, Calif., could lose as much as $30 million in sales this year. Furthermore, now that it has a relationship with ATI, Micro-Star could choose the Toronto graphics chip maker for other designs, hurting Nvidia's sales even more, he said. "Up to now, Micro-Star has used Nvidia in 100% of its graphics cards," Rothdeutsch said. "This loss may open the door wider to ATI and place other design wins at Micro-Star at risk for Nvidia." Rothdeutsch cut his full-year 2004 revenue and share earnings estimates for Nvidia to $1.8 billion and 61 cents, respectively. His previous estimates were for $1.83 billion and 63 cents, respectively. He maintained his market perform rating and $11 target. Rothdeutsch doesn't own any Nvidia shares and Friedman Billings doesn't have an investment banking relationship with Nvidia. Source: Biz.Yahoo.com
