It's all been a bit doom and gloom at AMD of late. Both its biglaunches in 2007, the Radeon HD 2900 series graphics chips and its new Barcelona quad-core CPUarchitecture, have flirted with outright flop.

But if recent rumours of a killer new midrange graphics chipfrom graphics division ATI are true, there's hope yet for AMD.

As we reported earlier today, the new chip (codenamed RV670)promises to be more or less as powerful as ATI's existing flagship, the RadeonHD 2900 XT. Crucially, all 320 stream processors from the 2900 XT are presentand accounted for. But thanks to the use of a much finer 55nm productionprocess (the 2900 XT is an 80nm design), the new chip is much smaller andtherefore much, much cheaper.

The use of a simpler 256-bit memory controller is apparentlyto only concession ATI has made. But this in turn makes for a less complex PCBand in turn adds further to the video chipsets overall affordability.

In fact, that production process could allow ATI to actuallyclock the chip higher than the 742MHz of 2900 XT. Figures north of 800MHz arebeing mooted. If so, and if the final video boards come in under £200 asexpected, well, RV670 will be the funkiest affordable graphics chip by far.

New weapon of choice

Indeed, the card will almost definitely be the new weapon ofchoice for value-conscious gamers. Existing affordable midrange DirectX 10video boards like the NVIDIA GeForce 8600 or ATI's own Radeon HD 2600 simplyaren't cutting it in the latest DirectX 10 games such as BioShock. They onlyoffer around one third the rendering oomph of a high end video card.

What's more, unless I'm sorely mistaken, NVIDIA has nothingin its upcoming roadmap to match RV670 for both price and power. OK, NVIDIAdoes have a new midrange part of its own, probably to be sold under the GeForce8800 GT moniker.

But word is that board is somewhat cut down rather than asimple die shrink of the full fat GeForce 8800 GPU offering around two thirdsthe performance. In other words, AMD should have an outright winner on itshands.

It's also worth noting that RV670 looks extremely suitable for use in notebooks. Currently, neither ATI nor NVIDIA has managed to squeeze a high performance DX10 chip into a laptop PC.

Actually, RV670 looks so good, you have to wonder what rolewill be left for the bruiser that is the Radeon HD 2900 XT. It's a big oldbeast on 80nm, pricey to make and extremely power hungry. If RV670 really isessentially a die shrink minus the 512-bit memory bus, then the existing 2900XT will only offer an advantage when paired with a monitor running silly multi-megapixelresolutions.