The Imageon 2300 product line builds on ATI's reputation in the PC gaming market, where the company competes with market leader Nvidia. ATI recently landed a contract to build graphics chips for Microsoft's next-generation Xbox gaming console.
3D gaming hasn't yet taken off on mobile phones, but wireless gaming overall is already popular, and is expected to generate $1bn (£55bn) in revenues for telcos in the US alone by 2006, according to IDC. Nokia was one of the first to exploit the market with its N-Gage handset, which combines phone and gaming features.
"Imageon 2300 enables exceptional 3D gaming that will fully leverage and help monetise the higher bandwidth offered by 2.5G and 3G networks," said Azzedine Boubguira, ATI marketing director for handheld products, in a statement.
The chip is designed to take on other handset graphics-processing chores besides 3D: it handles 2D graphics, MPEG 4 decoding for 30 frames-per-second video playback, video capture, image compression and image decompression.
The Imageon line supports the OpenGL ES programming interface for rendering 3D, a subset of the OpenGL API used in the PC world.
The line of chips is currently on display at the Consumer Electronics Show in Las Vegas, and is at the sampling stage of manufacturing. Shipments will begin in the first quarter of this year, ATI said.
To date, the most visible effort in bringing 3D to the handset realm has been the PowerVR MBX core developed by UK chip designer ARM and Imagination Technologies. The core is based on Imagination's PowerVR rendering technology, earlier used in the Sega Dreamcast gaming console.
ARM said several chipmakers, including Texas Instruments, have already licensed PowerVR MBX, and the first products using the technology should appear this year or next year.