Money. Depending on who you ask, it’s a gas (Pink Floyd), always sunny (ABBA), or the originator or mo problems (Biggie). What none of these seminal recording artists successfully address though is that it’s also required in huge quantities to research and develop new products in the technology sector. Intel, for example, spend an estimated $2.97 billion per quarter on R&D, based on the company’s own financial statements. NVIDIA and AMD’s figures are considerably less extravagant, but their respective figures do nontheless tell a story.
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Figures taken from YCharts.com (via reddit) indicate that NVIDIA spent $329 million last quarter, whereas AMD shelled out $241 million. The disparity between the budgets of Team Green and Team Red and that of Intel can be explained thusly: Intel have their fingers in many pies, and by comparison neither NVIDIA nor AMD are as diverse in their product offerings.
However the $88 million R&D spend difference between the two companies last quarter also tells the story of two brands with very different shares of the consumer graphics card market. Although GPUs aren’t the sole trade of either party, they’re an important part of their business. The latest Steam hardware survey figures puts NVIDIA with a share of over 50% (54.51 to be exact) while just 26.32% of Steam gamers are using AMD graphics hardware.
So shouldn’t AMD be spending more on R&D than their rival if they want to gain back market share? After all, competitive low to mid-range graphics cards are informed by ultra-high end tech that drips down, right? Well, further inspection of the R&D expenditure figures from each company shows that the relationship between chucking cash at the folks in lab coats and market share isn’t cut-and-dry.
From 2003-2009, AMD consistently spent more per quarter on R&D than NVIDIA. A lot more. AMD’s June 2008 report states a $208.51 million quarterly spend, meanwhile NVIDIA’s July 31 report that same year indicates a $65.62 million spend. And while AMD did briefly enjoy a majority discrete graphics market share majority in 2004, with a peak of 58.5%, their R&D budget remained much higher than NVIDIA’s as the latter clawed their way back to a market share that hasn’t dipped below 50% for a decade now.
Despite that, AMD continued to keep their R&D budget higher than NVIDIA until 2013. The 31st March 2013 report from AMD cites a $312 million spend, whereas NVIDIA’s report from 30th April that same year records a $327.16 million spend. In the months and years between then and now, that gap has slowly but surely widened, and AMD’s share has continued along a slight downward trajectory.
There are no clear conclusions to be drawn from these YCharts figures, then, nor a clear solution to AMD’s problem. It’s been a relatively quiet year in the consumer graphics card dogfight between the two companies, but AMD’s Graphics Core Next tech does look very competitive with NVIDIA’s hardware – some even claim superior – in DirectX12 applications. How that translates to the next year of Steam hardware survey figures will make very interesting reading.