Nvidia Will License Graphics Cores to Device Makers

Nvidia officials say the new business model will help them address the expanding range of compute devices, including tablets and smartphones.

Nvidia will license its graphics technology as officials look to more quickly expand the company’s reach into the rapidly growing range of new computing devices.

Nvidia’s history has been selling its GPUs to device makers for years, primarily into PCs. However, the range of devices and systems has expanded significantly beyond PCs, to include mobile devices like smartphones and tablets, game consoles and high-definition screens, according to David Shannon, executive vice president, general counsel and secretary of Nvidia.

To ensure that Nvidia’s technology gets into as many of these devices as possible, the company will license its GPU cores and visual computing patent portfolio to device makers, Shannon said in a June 18 post on the Nvidia blog.

“Yesterday’s PC industry, which produced several hundred million units a year, will soon become a computing-devices industry that produces many billions of units a year,” he wrote. “And visual computing is at the epicenter of it all. … But it’s not practical to build silicon or systems to address every part of the expanding market. Adopting a new business approach will allow us to address the universe of devices.”

Shannon said Nvidia has licensed some of its technology in the past—including an earlier GPU core to Sony for its PlayStation 3 gaming console. In addition, the company has gained more than $250 million a year from giant chip maker Intel, which licenses Nvidia’s visual computing patents.

The move also mirrors ARM’s business model, where the company designs low-power systems-on-a-chip (SoCs) and licenses those designs to a range of chip makers, including Samsung, Qualcomm, Texas Instruments and Nvidia. Those vendors add their own technologies to the ARM designs and then sell them to makers of such devices as smartphones, tablets and embedded systems.

Imagination Technologies also licenses its graphics core designs to chip makers.

Nvidia’s announcement comes at a time when the company is being impacted by declining sales in the global PC market, and competition is increasing from chips with integrated graphics technology, including those from Intel and Advanced Micro Devices. AMD, through its semi-custom chip business, will supply chips to Microsoft’s upcoming Xbox One gaming and entertainment console, a deal that reportedly could bring the chip maker $3 billion. In addition, AMD won business from Sony for its PlayStation 4 console and Nintendo for its Wii U system.

However, Nvidia officials are confident in both their Kepler GPU architecture and Tegra CPU offerings. The company will begin by licensing the GPU core based on Kepler, which includes DirectX 11, OpenGL 4.3 and general-purpose GPU (GPGPU) capabilities, Shannon wrote.

“Through our efforts designing Tegra into mobile devices, we’ve gained valuable experience designing for the smallest power envelopes,” he wrote. “As a result, Kepler can operate in a half-watt power envelope, making it scalable from smartphones to supercomputers. Kepler is the basis for currently shipping GeForce, Quadro and Tesla GPUs, as well as our next-generation Tegra mobile processor codenamed Logan. Licensees will receive all necessary designs, collateral and support to integrate NVIDIA’s powerful graphics cores into their devices.”

By licensing the visual computing portfolio, Nvidia will enable chip makers to “develop their own GPU functionality while enjoying design freedom under the best visual computing patent portfolio in the world,” Shannon wrote.

The driving force behind the licensing idea is the rapid proliferation of new compute devices, he said. Nvidia has looked to address this growth in several ways, from developing the Tegra SoCs to the GRID system that streams games from the cloud and the Shield portable gaming system.

“This opportunity simply didn’t exist several years ago because there was really just one computing device—the PC,” he wrote. “But the swirling universe of new computing devices provides new opportunities to license our GPU core or visual computing portfolio.”