We've heard a rumour saying that ATI plans to discontinue 40nm based RV740 chips due to its very bad yields and before this escalates any further, so let us simply say that this is not true. We checked with multiple sources and people in the know said this is absolutely not true and we don't have any reason to doubt them. Same sources have confirmed that yields are not as good as ATI would like them to be and at the same time, demand for this product is huge but 40nm yields are getting better and the situation is improving. If anything, their RV740 was a first 40nm vessel product and a learning curve for RV870, next generation performance 40nm chip, scheduled for launch later this year. - FudZilla

Yield At 40nm Burden RV740 Won't Be Discontinued

The guinea pig customer and chip, RV740 are not exactly flying out of TSMC's manufacturing lines as we've learned that 40nm was a slow and bad transition. As you could imagine, these Radeon HD 4770's are not available in hundreds of thousands and due to its great performance it gets sold out quicky, but the part of the reason is that yields are bad and ATI can not produce as much as market wants. And really TSMC is the one to blame as their 40nm process has a lot of leakage and bad yieds. Also NVIDIA should unveil the notebook 40nm generation GPU at Computex and it should find its way to many gaming notebooks.

We also heard that 40nm node is a really difficult one closely resembling a walk in the park, being followed by big dragons dropping napalm all over and trying to bite your head off. And that's how easy it is, just so you can somehow paint the picture. Though as days go by their process will just be getting better and these issues should all get resolved in the near future.