NVIDIA to enter the CPU domain?

By: Pallab Jyotee Hazarika

The recent rumors suggest NVIDIA could be entering CPU market sooner than expected

Once the ION came out where NVIDIA combined an Intel processor with its graphics card, it was only a matter of time before NVIDIA forays into the zone of CPUs completely which is till now ruled by Intel. 

Broadpoint AmTech analyst Doug Freedman reportedly (by pcmag) mentioned that Nvidia could be forced into the CPU market by necessity, to preserve both GPU and chipset revenue. "We believe Nvidia could (sooner rather than later) enter the x 86 CPU businesses, with investor response largely a function of the market share opportunity given the CPU roadmap range," Freedman wrote. "Nvidia will likely target mainstream and below performance and NOT leading core-i7 like levels."

Nvidia was tangled in a legal battle with Intel for their ION platform, which Intel claims uses technology they patent. This probably was halting development of its nForce line of chipset. This involves a considerable investment, for which NVIDIA needs to raise capital.

What ION is today (The Nvidia Ion platform bundles an Nvidia GPU with an Atom CPU to deliver graphics which are far superior to the integrated Intel GMA950 graphics controller found on most netbooks), seems to become the next-in-line strategy for chipset companies. Take for example Intel’s Larrabee project or what AMD refers to it as "Fusion," and which AMD plans to put into production in the second half of 2010.

NVIDIA could have two options – to start by making chips in-house, which will take quite a bit of R&D and money because most of the X86 patents Intel and AMD own. The other option will be to resort to inorganic growth, maybe by acquiring Via, which sits at a distant third to the two American chip making giants. That seems unlikely though, as Freedman puts in and pcmag reports. Alternatively, they could use something like the Transmeta code-morphing technology that would interpret X86 codes, and transform it into its own native instruction set.

There could be a need to overcome challenges like production capabilities of TSMC and GlobalFoundries, and more importantly – NVIDIA’s brand equity outside the gaming domain.

Overall, it is on NVIDIA to pull off the daunting task of developing an X86 CPU in-house, in which case it will also have to look-out for Intel and AMD's constant poking with patent infringement. For me, personally, it makes personally more sense to acquire somepne like Via and build superior platform based on these concepts.