Nvidia concluded it would exit the chip-set business as Intel made it impossible for the company to operate in the market, the company's CEO Jen-Hsun Huang said this week.
Nvidia provided chip sets, with mostly integrated graphics, for PCs but is in the process of exiting the business as operations are restructured around graphics cards and mobile chips, Huang said this week at the Kaufman Brothers Investor Conference in New York.
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"We've been exiting that business for quite a famous reason, because of a dispute with Intel. They preferred that we weren't in that business," Huang said. "Although it was a large business opportunity for us, staying in it was really impossible considering their displeasure for it."
Intel and Nvidia in January settled a long-standing legal dispute when the companies signed a patent cross-licensing agreement in January. Intel agreed to pay Nvidia $1.5 billion, and the companies got licenses to each other's patents. Prior to the settlement, Intel and Nvidia exchanged countersuits asserting rights over use of new Intel's new DMI (direct media interface) bus, which links the CPU to components inside a computer.
But Huang contended that the company is reinventing itself around mobile chips and graphics cards. The company has hit pay dirt with its Tegra chip for mobile phones and tablets. The company's latest Tegra 2 chip is used in tablets from Motorola, ViewSonic, and Toshiba, and in smartphones such as Motorola's recent Droid Bionic. A quad-core chip code-named Kal El will reach tablets by the end of the year.
Nvidia is also growing its graphics market by expanding into new areas beyond the PC, Huang said. Nvidia has taken its graphics cards into servers and supercomputing. The world's second-fastest supercomputer, the Tianhe-1A supercomputer in China, incorporates thousands of Intel CPU cores and Nvidia graphics chips to deliver sustained performance of 2.5 petaflops and peak performance of 4.7 petaflops.
Despite their differences, Nvidia will continue working with Intel in the discrete graphics card market, Huang said. Intel is integrating its own graphics processor inside CPUs, but Nvidia's discrete graphics cards can work with Intel's chips to improve PC graphics. PCs with discrete graphics cards generally cost more and are targeted at advanced users, but deliver a better graphics experience.
"We're going to stay out of the basic PC market, we're not going to compete with Intel," Huang said.
Nvidia this week said it anticipates revenue of $4.7 billion to $5 billion for fiscal 2013, which begins on Jan. 30 next year.