Nvidia Will No Longer Just Sell Chips, But License Graphics Technology as Well

Posted by at 3:55 pm on June 18, 2013

NVIDIA Kepler ArchitectureNvidia Chief Executive Jen-Hsun Huang at Global Technology Summit in San Francisco on Tuesday told the group Nvidia would start licensing graphics cores and visual patents so his firm could take more advantage of the booming market for smartphones and tablets and tap markets it could not reach through selling its own chips.

“The bottom line is the world has changed and we’re expanding our business model to serve markets that we historically could not serve,” Huang said. “This opportunity simply didn’t exist several years ago because there was really just one computing device – the PC. But the swirling universe of new computing devices provides new opportunities to license our GPU core or visual computing portfolio.”

Nvidia in recent years has established itself in the fast-growing mobile market, creating processors for tablets that take advantage of its graphics expertise.

But Nvidia has faced tough competition from the much larger Qualcomm and Samsung, limiting its success.

The move will put Nvidia into direct competition with UK-based Imagination Technologies, whose graphics technology is used in Apple’s iPhone, Samsung’s Galaxy S4 smartphone and other devices. Apple and Intel own stakes in Imagination.

Nvidia will also be competing against UK-based ARM, which licenses processor technology to chipmakers including Nvidia and is increasingly targeting graphics as well.

Nvidia is integrating Long Term Evolution (LTE) features on upcoming versions of its Tegra chips to aid in the battle to be used in smartphones and tablet than losing out to Qualcomm.

But this not fully new business model for Nvidia.  Nvidia licened earlier GPU core to Sony for the Playstation 3.  Plus it has received more than $250 million a year from Intel as a license fee for the use of visual computing patents.

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