Nvidia's 'Project Denver' Chip Push Comes at Right Time: IHS iSuppli

Nvidia officials picked the right time to jump into developing chips that offer integrated computing and graphics capabilities on the same piece of silicon, according to research firm IHS iSuppli.

In a research note issued Feb. 2, analysts at IHS iSuppli said that by 2014, such processors will power 82.9 percent of all notebooks shipped, compared with 39 percent in 2010. In addition, the market for non-x86 integrated chips got a boost early last month when Microsoft officials announced that the next version of their Windows operating system would support processors using designs from ARM Holdings.

Microsoft made its announcement at CES (the Consumer Electronics Show) 2011 in early January, the same event where Nvidia announced its “Project Denver.” Nvidia officials said that with Project Denver, they plan to develop chips that will integrate their own graphics technology with CPUs created using ARM designs, and that these ICs will be used in everything from tablet PCs to workstations to servers.

“Nvidia’s project Denver will usher in a new era for computing by extending the performance range of the ARM instruction-set architecture, enabling the ARM architecture to cover a larger portion of the computing space,” Bill Dally, vice president and chief scientist at Nvidia, said in a Jan. 5 blog post in support of the project launch. “Coupled with an Nvidia GPU [graphics processing unit], it will provide the heterogeneous computing platform of the future by combining a standard architecture with awesome performance and energy efficiency.”

Nvidia’s push will bring it into greater competition with Intel and Advanced Micro Devices, both of which are pushing new platforms to integrate their x86-based CPU technology onto the same die with discrete-level graphics capabilities. At CES, Intel and AMD both unveiled the first products from their respective platforms—Intel with its “Sandy Bridge” second-generation Core-i processors, and AMD with its Fusion APUs (accelerated processing units).

However, the industry’s transition toward greater mobility is opening up significant business opportunities for chip makers offering integrated CPU and GPU capabilities, and Nvidia is getting in at the right time, according to IHS iSuppli analyst Matthew Wilkins.

“Nvidia’s entry into the microprocessor segment makes sense, despite the current market dominance of Intel and AMD,” Wilkins said in the research note, pointing to the expected rapid growth of notebooks that will use processors with integrated graphics. “This presents an opening for Nvidia to make inroads into the MPU market.”

Nvidia’s Project Denver comes at a time of significant change in the processor business. Intel and AMD, which for years has dominated the desktop and mobile PC space, now are looking to bring their x86-based products into the mobile market, which is seeing an explosion of smartphones and tablet PCs powered primarily by chips designed by ARM and manufactured by the likes of Samsung, Qualcomm and Texas Instruments.

Meanwhile, ARM and some of its partners, such as Marvell, are looking to push their chips into low-power servers to take advantage of the rapid adoption of virtualization and cloud computing.

Throwing its weight around is Microsoft, whose Windows OS has been closely tied to the x86 architecture. Microsoft, with its Windows Phone 7 and Windows 7 operating systems, is trying to push its own way into the burgeoning mobile space, which currently is dominated by Apple’s iPhone and iPad and the myriad Google Android-based devices flooding the market.

It’s the software side where Nvidia faces the biggest challenges, according to IHS iSuppli. The PC market is dominated by the x86 architecture, so PC software is made to run on x86-based systems. Nvidia and its ARM-based ilk need to find a way to get software developers to create PC products for non-x86 systems, according to the research firm.

However, Microsoft’s announcement regarding ARM support is a significant move in that direction, IHS iSuppli said. Not only will Windows support the ARM architecture, but so will the world’s top productivity suite, Microsoft Office.

IHS iSuppli analysts said they expect Nvidia will be most successful initially in such areas as tablet and low-end notebooks, where price and ease-of-use are in demand.

Servers could be a more difficult segment to win over, they said. Companies are conservative animals, and they are less likely to move to new hardware platforms for their business-critical applications. The IHS iSuppli analysts noted that the move from RISC- to x86-based chips took several years.

However, corporations are seeing their data centers grow in size, thanks to such technologies as cloud computing, and the demand for greater energy efficiency from their IT infrastructure is growing, which plays into low-power reputation of ARM chip designs, the analysts said. Given that, they expect Nvidia will focus a lot of its Project Denver efforts on servers.

Intel and AMD, both of whom are driving down the power consumption of their chips, will still pose a challenge. In addition, Microsoft—also looking to stake a claim in the cloud-computing space—is pushing both chip makers to increase the scalability of their low-end chip platforms. Microsoft officials reportedly are pushing the chip vendors to develop 16-core server versions of their low-power chips—Atom for Intel and “Bobcat” for AMD—that would offer improved performance and energy efficiency.