Tough times ahead for Nvidia? Part two

The core PC graphics business

As for Nvidia's core PC graphics business, Perez agrees that the momentum is in the $120 to $199 range and that its entry-level discrete business is increasingly under threat, not least from Nvidia's own GeForce 9400 integrated graphics. But he also thinks that there's plenty of potential for the GeForce 9400M integrated to cash in on the burgeoning $399 to $599 notebook market.

In the next six to 12 months, that is undoubtedly true. But beyond that, it's hard to see how the introduction of Intel and AMD's CPU-GPU chips won't do serious damage to the 9400M's prospects, no matter how awful Intel's integrated graphics may turn out to be.

We are not, therefore, entirely convinced by Perez's pitch. Nvidia's chipset business will definitely be pinched by the coming era of fusion processors, the only question is by how much. And that inevitably leads to the greatest Nvidia-related question of all. Will the company eventually be forced to somehow get in on the x86 game and produce a CPU core of its own?

Here, Nvidia is currently putting out mixed messages. Perez dismisses the idea, saying, "We didn't need x86 for our first 15 years and we won't need it for our next 15." However, Nvidia VP Mike Hara recently told an audience of investors and analysts that it would eventually make sense for Nvidia to do with x86 what it has done with an ARM core in its Tegra mobile phone processor.

In other words, include a general purpose x86 core within a larger system-on-a-chip design. The only problem with that idea is that of the x86 core itself. Where would it come from? While ARM is happy to license one of its cores to Nvidia, it's hard to imagine AMD or Intel doing the same. Which leaves the likes of Via as a possible, but distinctly underwhelming, potential CPU core supplier.

Well, that's assuming Nvidia is unable to pull off a spectacular legal coup and produce an x86 core of its own without incurring the litigious wrath of both AMD and Intel. Whatever happens, the next few years will be literally make or break for Nvidia.

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