Graphics chipmakers are shuffling about East Asia trying to vie for the best strategic market position, as the latest moves by NVIDIA and ATI confirm. ATI recently signed a contract with the South Korean government to set up its first product R&D center to be located outside of North America. Meanwhile, NVIDIA announced that it is moving its sales headquarters for the Asia-Pacific region from Singapore to Taipei.

 

ATI's decision to establish an R&D center in South Korea is noteworthy not only because it is the first time the company has allowed R&D to be conducted outside of North America, but also because ATI's chairman of the board personally went to Korea to negotiate and sign the deal. The scale of the center is relatively small, starting with 10 researchers. Expansion will occur as the workload dictates. The greatest significance of the deal lies in what it suggests about ATI's intentions to court mobile phone business from major Korean consumer electronics firms such as Samsung and LG. 

 

For two years, ATI has made clear that it hopes to capture the market for audiovisual imaging processors that are used in mobile phones and digital TVs. Reports indicate that cooperation between ATI and Samsung has been gradually increasing. Samsung is one of ATI's most important clients for chips used in digital TVs. ATI has already secured orders for Samsung's next generation digital TVs, which it plans to start shipping next year. All in all, ATI has become Samsung's primary supplier of graphics chips. Sony has also began using ATI's chips in its digital TVs. ATI's stand-alone graphics chips for PCs have completely replaced NVIDIA's chips in Samsung's product line. Many see the R&D venture as a message from ATI that it intends to capitalize on inroads it has made with Samsung by competing for mobile phone chip orders from Samsung and LG. However, NVIDIA may have the technological advantage on ATI, as ATI's joint venture with Media-Q has provided the company with more sophisticated imaging processor technology for hand-held devices.

 

NVIDIA's decision to move its regional sales headquarters from Singapore to Taipei is aimed at consolidating its relationships with Taiwanese motherboard and graphics card makers. Originally, NVIDIA planned to move the regional headquarters to Shanghai, but Taipei was chosen instead in order to deepen cooperation with Taiwanese players, who control roughly 70% to 80% of the global graphics card market.