Graphics chip specialist
NVIDIA (Nasdaq: NVDA) is going back to
Graphics 101.
Lawsuitsare forcing the company to hit the emergency
brakes on its development of system chipsets, so
NVIDA's futurehangs on the success of its graphics
products again.
NVIDIA has been a major player in system chipsets for many
years, providing the basic building blocks of modern computer
systems for computers based on processors from
Intel (Nasdaq: INTC) and
Advanced Micro Devices (NYSE: AMD). While
AMD and market forces have pummeledNVIDIA's
consumer graphicsbusiness lately, sending that segment
into a money-losing tailspin, the chipset business just
turned in a very strong quarter. And now, it seems to be over
and done.
Citing "Intel's improper claims to customers" and "unfair
business tactics" regarding
licenses to support Intel processors, NVIDIA says it
can't continue to invest in this line of business anymore.
Development and sales of NVIDIA chipsets for
Intel's latest microprocessor technology
has been halted -- and NVIDIA is dodging direct questions on
whether it will continue to develop AMD chipsets.
NVIDIA claims to sell more AMD chipsets than AMD itself,
and supplies products for Intel systems to system builders
like
Dell (Nasdaq: DELL),
Apple (Nasdaq: AAPL),
Hewlett-Packard (NYSE: HPQ), and
Lenovo . This change of strategy will have a
big effect on the industry as PC makers are forced to shift
reliance on Intel and AMD chips until this dispute is
resolved. If you ask NVIDIA, that will happen in court, with
the trial set to start next year. Knowing the speed of our
legal system, it could be years before NVIDIA makes a full
return to this lucrative market.
Then again, people do change their minds occasionally, and
I wouldn't be surprised to see NVIDIA and Intel settle the
matter out of court and move on with their respective
businesses as before. In fact, the whole brouhaha could be
nothing more than a negotiating tactic from NVIDIA:
Compromise on
your demandsor lose your license payments entirely.
Do you think we'll see NVIDIA make a full return to
chipsets in our lifetime? Discuss in the comments below.
This article was originally published as
NVIDIA Can't Handle the Heat, Gets Out of the Kitchenon
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