The head of ATI, graphics product group of Advanced Micro Devices, Rick Bergman, said during a meeting with financial analysts late last week that the company plans to refresh its graphics chip lineup early next year with at least three new product offerings. Unfortunately for AMD, which needs to return to profitability, the bulk of new products will be aimed at sub-$150 market segment with relatively low margins.

“We want to address the enthusiast space [with the ATI Radeon HD 3800]. Early in 2008 we will introduce code-named R680 product that will take two of those [chips] on a single board and will ship to customers with scaling close to 2x the performance of the existing [ATI Radeon HD] 3800 products,” said Rick Bergman, senior vice president and general manager of AMD’s graphics products group.

The code-named ATI R680 graphics card, which is based on two ATI Radeon HD 3800-series (RV670) graphics processing units (GPUs), will be the highest-performing offering by AMD’s graphics product group early in 2008. The card will retail for “over than $300” and will be able to work in pair with another similar one, which will give end-users the power of four GPUs.

“We are also going to have two other products for very important volume segments – mainstream and value – ATI RV620 and ATI RV635. We will introduce those products in January. Both of the products are 55nm and both of them will ship with the first silicon as well,” Mr. Bergman said.

ATI RV620 and ATI RV635 graphics chips are projected to substitute currently available ATI Radeon HD 2400 (RV615) and ATI Radeon HD 2600 (RV630) graphics series in January, 2008. The new GPUs will feature DirectX 10.1, PCI Express 2.0 as well as “second generation UVD” unified video decoding engine. Other details were not revealed and it is unclear whether the new parts for entry-level and mainstream markets will feature higher performance compared to currently available graphics offerings from AMD’s graphics product group.

AMD hopes that the new ATI Radeon HD 3000-series desktop products and their mobile brethren code-named M8x will help the company to win contracts with original equipment manufacturers (OEMs), which guarantees stable revenue streams for several months.

The firm indicated that if in 2007 its discrete graphics chips could be found in about 60 notebook designs, then in 2008 its standalone graphics adapters will be present in about 100 notebook designs. The company did not disclose whether those notebook designs with Mobility Radeon inside are based on AMD Turion 64-series processors, which are found in 20% - 25% of notebooks available in the world, or are powered by Intel Core 2 chips, which command 75% - 80% of the whole mobile microprocessor market.

“In 2008, during the summer, it’s fully my expectation, ATI graphics will return to the No. 1 spot, which [we used to hold] for 7 or 8 years as the leading notebook discrete graphics vendor,” AMD’s Rick Bergman hopes.

While AMD manages to increase its shipments graphics cards, its growth is below that of the market. According to Jon Peddie Research, total shipments of graphics adapters – both discrete and integrated – for the third quarter were 97.85 million units, up 20% in over the second quarter. Compared to the same quarter last year shipments were up 18.2%. During the quarter Nvidia Corp. increased its shipments by 25.1%, Intel Corp. boosted sales of its chipsets with built-in graphics core by 21.6%, whereas graphics product group of AMD only posted 17.8% shipments raise.