Jerry Sanders, the retired CEO of AMD, once said that only the big boys have Fabs, and this might be Nvidia’s and ATI’s biggest problem in the future.

Nvidia started an open conflict with Intel, while ATI embraced by AMD is standing aside and waiting to see what will happen. Despite the fact ATI will also benefit by hurting Intel’s graphics numbers, it cannot risk one more failure, as the CPU guys slipped massively and it has not been able to compete with Intel for the last two years in a row. ATI chipsets and graphics are still in quite good shape, especially compared to Intel’s own offering.  

Intel currently has two operational 45nm FABs and these FABs will be capable of producing a highly anticipated Larrabee graphics parts. Intel currently produces its 45nm dual cores in D1D FAB in Oregon and FAB 32 in Arizona. Intel only produces 45nm dual-core, and later on it stitches two of them and makes a quad-core out of it, but this will change with Nehalem in Q4 2008, as Nehalem is native quad-core.
 
In 2008, Intel plans to launch two new FABs, FAB 28 in Israel and FAB 11X in New Mexico.

It is safe to say that by the time it needs to start production of Larrabee graphics part, Intel will have four factories that should be able to produce this graphics part. Larrabee debuts in 45nm at some point in 2009, but it's still quite a long way down the road to affect either Nvidia or ATI.  

Nvidia, ATI and Via all share the same problem, and the problem is called TSMC. TSMC is actually doing really fine for Nvidia and ATI in the last few years but it is traditionally at least one year or more behind Intel’s process transition.

TSMC currently doesn’t offer 45nm production while Intel does. Intel will be roughly year ahead of TSMC before this Taiwanese FAB is ready to start its 45nm production as if we remember correctly TSMC plans the GPU 45nm production in early 2009.

Let’s hypothesize for a second. If TSMC fails to implement a good 45nm process on time and make good yields out of it, both Nvidia and ATI will suffer. Intel has four FABs and has much more space for error as there is a high possibility that one of the four FABs will get it right.

Nvidia and ATI rely on TSMC or nothing and UMC, the other foundry, is good but for some primitive (less complex) graphics parts.

ATI has a bit better chances, as at one time it might start making its GPUs in one of the Dresden-based FABs; this is not a long-term plan but it's likely to happen. In 2010 AMD will produce its graphics inside of these FABs and the first 45nm graphics product to get out of the Dresden is Fusion, GPU on CPU mobile part.

This just brings a new perspective.