With Intel and AMD moving toward microprocessors that combine the CPU and graphics on the same piece of silicon, Nvidia could see its chip-set business disappear. However, Nvidia could also start making its own x86 processors to target both mainstream PCs and low-end mininotebooks, according to one analyst.
In the coming months and years, Intel and Advanced Micro Devices are looking
to change the way the world thinks about computing by combining the CPU and
graphics on the same piece of silicon.
In 2010, Intel
plans to release "Arrandale,"
a microprocessor that combines a
32-nanometer microprocessor along with a 45-nm graphics chip and the chip set.
Then, in 2011, AMD
plans to unveil its much-talked-about Fusion project
that combines elements
of the CPU and GPU (graphics processing unit).
For years, Nvidia,
which is best known for its graphics, sold chip sets that
supported x86 processors for both Intel
All told, chip sets account for about 30 percent of Nvidia's revenue, according
to a recent report. So, when these new versions of microprocessors appear, what
will happen to Nvidia?
The answer, according to Doug Freedman, an analyst with Broadpoint AmTech,
is that Nvidia plans to start making its own x86 processors "sooner rather
than later." If Nvidia enters the x86 market, the company can target mainstream
desktops and notebooks and low-end mininotebooks or netbooks with a combination
of CPUs, graphics chips and chip sets.
For a number of years, many speculated that Nvidia wanted to get into the
x86 processors business by buying Via
Technologies, the only other company that makes x86 CPUs.
wrote in a Nov. 3 research note that Nvidia has recently hired engineers from Transmeta-a
company that once challenged both Intel and AMD
but recently sold off all
of its intellectual property.
read more about Intel's legal issues, click here.
"We believe internally developed x86 solutions are more likely than
external acquisitions (i.e. VIA
Technologies)," Freedman wrote in his research note. "We believe that
[Nvidia] has hired former Transmeta staff extensively, and that instruction
code 'morphing' requirements have declined as more x86 instructions have come
off of patent coverage.
"In addition to the types of microprocessors Intel and AMD
are now building, Nvidia
is also involved in an ongoing legal dispute with Intel that centers on chip
Nvidia has now stopped making chip sets of next-generation Intel
processors until the court case is settled.
"Nvidia could lose leading access to emerging PCI express standards
[and] compatibility requirements for its peripheral discrete GPU cards,"
is moving ahead with building its own type of graphics processor called
which could mean that Intel will no longer need any
of Nvidia's graphics technology. At the same time, Nvidia
is moving into new territory-high-performance computing-
traditionally used microprocessors instead of graphics.
These forces have pushed Nvidia and Intel apart, which means Nvidia needs to
develop new ways to make revenue. (For its part, AMD
inherited the ability to make its own chip sets when it acquired ATI,
which means it now relies less on Nvidia for chip sets.)
In his research note, Freedman said there are several challenges to Nvidia
making its own x86 processors, as the company does not own its own
manufacturing facilities and foundries such as Taiwan Semiconductor
Manufacturing do not have the facilities to produce leading-edge processors.
"Die size and performance may not be fully optimized by foundries as
manufacturing investments address a broader range of semiconductor customers'
needs," Freedman wrote. "Platform development costs are likely to be
In addition, Nvidia is not well-known outside the gaming community, Freedman