Billy Wang, vice president for Asia Pacific and China at ATI Technologies, stated yesterday that the company’s new SB600 southbridge chip will be introduced in May. Wang was responding to recent speculation that ULi Electronics may no longer provide southbridges for ATI-based motherboard platforms, following its acquisition by ATI-rival Nvidia.

Billy Wang, vice president for Asia Pacific and China at ATI Technologies, stated yesterday that the company’s new SB600 southbridge chip will be introduced in May. Wang was responding to recent speculation that ULi Electronics may no longer provide southbridges for ATI-based motherboard platforms, following its acquisition by ATI-rival Nvidia.

According to Wang, ATI aims to boost 2006 revenues with new products, while lowering its capital expenditure (capex) and better controlling its production costs to boost profits, after failing to meet profit expectations last year. ATI has completed its new product roadmap for this year, including the upcoming SB600 to be manufactured at Taiwan Semiconductor Manufacturing Company (TSMC).

Before Nvidia’s takeover, ULi saw the majority of its sales in the latter half of 2005 coming from strong southbridge demand for use with ATI northbridges, at a time when ATI was the first supplier of Pentium 4-based integrated PCI Express chipsets in the entry-level chipset market. After Nvidia’s ULi acquisition, Nvidia’s strategic plan to stop supplying the ULi M1575 and M1573 southbridge chips, which were bundled with ATI’s RC410 chipset, was aimed to discourage motherboard makers from adopting ATI solutions, a March 27 article cited market speculations as indicating.

In ATI’s fourth quarter of fiscal 2005 (ended August 31, 2005), the delayed launch of its 90nm R520 graphics processing unit (GPU) led to a quarterly net loss of US$ 103.5 million for the chip vendor. In contrast, an earlier offering of Nvidia’s GeForce 7800 GTX GPU drove up its net income significantly to US$ 74.8 million in the second quarter of fiscal 2006 (ended July 31, 2005).

Until the end of last year, when Intel re-entered entry-level chipset production, ATI saw increasing demand for its RC410 integrated chipsets help it return to profitability. ATI posted a net income of US$ 7.6 million in the first quarter of fiscal 2006 (ended November 30, 2005). The impact of Intel’s return to the entry-level chipset market is yet to be seen.