More information on NVIDIA's chipset business
Subject: Chipsets | October 8, 2009 - 11:00 PM | Ryan Shrout
It would appear I stirred up quite the dust cloud when I wrote that NVIDIA was essentially exiting the chipset business in my recent "State of NVIDIA" editorial. Everyone from the Wall Street Journal, to MarketWatch, to PC Magazine and even CNet have put in their two cents about the ordeal. As you might imagine this got NVIDIA's attention and while they were at first NOT going to put out a statement on the issue, they obviously changed their minds this afternoon. I'll break up their statement a bit at a time with commentary in between:
This is completely correct - NVIDIA is not closing their doors on selling or producing existing chipsets, either for AMD or Intel platforms. The GeForce 9400M and the ION names are, as of right now, essentially referring to the same product - the one used in all current Apple MacBook Pro machines (as well as several of the Apple iMac configurations) and numerous netbooks and nettops like the HP Mini 311.
The HP Mini 311 powered by NVIDIA ION
It is also true that there are as-of-yet unannounced systems coming out this fall and winter based around the ION platform that will continue to drive revenue for NVIDIA into 2010.
This statement is basically telling us "hey, we still are selling those chipsets we released in 2006 for the AMD platform." While that is true, the product is not being updated or innovated at all. But as long as NVIDIA can sell it to partners and make a profit, I am sure they will continue to do so.
There are two key points in this statement. First, NVIDIA claims they are continuing to innovate for Intel's platforms where there is a front-side bus involved as that is the one area that without a doubt NVIDIA knows they are permitted to develop for. I do know that NVIDIA has just one more chipset planned for this segment, what we essentially know as the ION 2 platform, that is being built pretty much exclusively for a single major OEM - of the fruit variety. Surely you didn't think Apple would base almost its entire line of products on a technology without an upgrade path? Might we see ION 2 in other platforms like netbooks and component-level products? Probably, but ION 2 definitely only has a single target in mind.
If we consider the fact that ION 2 is basically a completed product at this time, with only very minor changes and tweaks being done to suit the OEM in question, then we can rest assured that chipset development at NVIDIA is essentially over - just to reiterate my original point.
The original ION reference board
The second point made by NVIDIA here is that they are no longer developing for the current generation desktop Intel platforms because they have essentially be locked out of the platform by Intel's legal department. The debate will rage on for months if not years about who is legally correct here, but it will not matter - NVIDIA has decided it is not worth the cost to do business with Intel in this area. Intel has a nasty reputation for pushing out competition like this and it seems obvious that it has happened once again.
A cheery conclusion, but one that simply tries to hide the fact that NVIDIA is leaving the once-profitable chipset business behind. The term "well into the future" is purposely ambiguous after all - ION and the ION 2 product could in fact last into 2011 if NVIDIA plays its cards right or it could fizzle out in mid-2010 depending on how aggressive Intel becomes on pricing, etc. After ION 2 sees the door we can assume that parts of the chipset team at NVIDIA will survive to do marketing and support of the product but engineers will be reassigned or looking for new work outside the company.
If you want to read up on the current status of NVIDIA as a whole, including graphics, GPU computing, gaming and chipset markets, I recommend you read over my recent State of NVIDIA: For better or for worse editorial posted earlier in the week.
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