Nvidia Says Tablets Showcase Its Chip ProwessMSFT MSFT Microsoft (stock symbol)
MSFT Movimento Sociale Fiamma Tricolore (Italy)
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MSFT Macalester Students for Fair Trade ) and Hewlett-Packard (HPQ HPQ Hewlett-Packard Corporation (NYSE)
HPQ High Priority Queue ), are smaller than traditional laptops but capable of handling many of the same tasks. They're considered ideal for gaming, video, and Web access.
And if Nvidia Chief Executive Jen-Hsun Huang has his way, tablets will also be a showcase for the graphics chips that are his company's mainstay. "When you look at these things, they're basically screens," Huang says of tablets. "We're really good at making things look good on screens." So Nvidia designed the latest version of its Tegra chip, introduced at CES on Jan. 7, with tablets in mind.
By aiming at tablets, Nvidia is trying to get its chips into a wider range of devices and mount a bigger challenge to chipmakers Intel (INTC INTC Intel (NASDAQ symbol)
INTC Interrupt Controller ) and Advanced Micro Devices (AMD (Advanced Micro Devices, Inc., Sunnyvale, CA, www.amd.com) A major manufacturer of semiconductor devices including x86-compatible CPUs, embedded processors, flash memories, programmable logic devices and networking chips. ), which dominate the semiconductor market. Nvidia says its chips, or GPUs [for graphics processing units], are good at more than just graphics and are capable of such tasks as financial modeling, scientific computing, and consumer-grade entertainment. "The big opportunity right now is with consumer-focused handheld products," says Jim McGregor, an analyst at market research firm InStat. "If it's for consumers, then graphics are going to be very important."
A Lot of Interest
Manufacturers Asus, Compal, and Quanta are working on tablet designs using the Tegra chip, Huang says. Tablets using Tegra will be available in the second quarter and will be capable of playing music for 140 hours or video for 16 hours on a single battery charge. At CES, Huang demonstrated devices using Nvidia's chip-playing videos and browsing the Web. Nvidia also showed a tablet using a Tegra chip that streamed HD video over a 4G wireless connection provided by Verizon Wireless, which is owned by Verizon Communications (VZ) and Vodafone (VOD).
Compal and Quanta build computers under contract for such better-known companies as Dell (DELL), Hewlett-Packard, and Apple (AAPL). Huang declined to elaborate on which U.S. computer makers would carry Tegra. Shares of Nvidia (NVDA NVDA NVIDIA Corp (stock symbol)
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NVDA NonVisual Desktop Access (open-source screen reader) ) rose 5%, to $18.56, on Jan. 8.
Nvidia faces plenty of competition in the tablet market. Qualcomm (QCOM QCOM Qualcomm, Inc. (stock symbol) ) built its Snapdragon chip for tablet-style computers. Intel's Atom processor is used in netbooks, or small notebooks. And Texas Instruments (TXN TXN Texas Instruments (stock symbol)
TXN Transaction (databases)
TXN Tunxi, China (Airport Code)
TXN Tarxien (postal locality, Malta) ) hopes to get a version of its OMAP OMAP Office of Medical Assistance Programs (Oregon Department of Human Services)
OMAP Open Multimedia Applications Platform (Texas Instruments semiconductor operating system) chip, widely used in mobile phones, into tablets. Broadpoint.Amtech analyst Doug Freedman reduced his rating on Nvidia shares to "sell" from "neutral" on Jan. 4 in part because he's concerned the market for Tegra won't be as big as Nvidia hopes. "We need to see not one, not two, but several large-volume applications for that chip," Freedman says. "Nvidia is going to have trouble growing because of the investments they are going to have to make in their business."
Eye-popping graphics for games and entertainment are only part of Nvidia's plan to remake computing. Nvidia's graphics chips are used for so-called parallel computing, which performs multiple computing tasks on a single set of data simultaneously, making the chips especially useful for large, complex computing problems. "Graphics is a parallel problem," says Dan Vivoli, an Nvidia senior vice-president and one of Huang's key lieutenants. "You need to run a separate computing task for each pixel on the screen, and you need to run them at the same time."
High-performance computing has traditionally been the domain of Intel and AMD, which make multifunction chips known as CPUs, or central processing units. But given that GPUs excel at parallel computing, they are now more frequently used for high-performance computing. "We started to get people asking us to make these chips useful for more general tasks," Vivoli says. SciComp has used Nvidia chips to simulate variable scenarios in interest rates and stock and commodity prices. GeoStar, a Michigan-based gas exploration firm, has used Nvidia chips to map underground conditions in the search for gas and oil.
Intel spokesman Nick Knupffer says Intel's so-called Xeon processors are found in the "vast majority" of high-performance computing systems and are likely to remain the leader. "Users have told us loud and clear that Intel's Xeon processors [and planned Intel products) are precisely what they are looking for," he says in an e-mail.
A Future in Autos, Too
While GPUs will never fully replace a CPU CPU
in full central processing unit
Principal component of a digital computer, composed of a control unit, an instruction-decoding unit, and an arithmetic-logic unit. in a computer, they may begin to play a more central role, says InStat's McGregor. "Nvidia has done a really good job of applying the knowledge it gained in graphics and turning it to other uses," he says. In the overall graphics market, which includes cases in which the graphics are included on the same chip as the CPU, Intel is the leader, accounting for 53%, compared with 25% for Nvidia and 20% for AMD, according to chip researcher Jon Peddie Research. In standalone, or "discrete," graphics chips, where Intel doesn't participate, Nvidia holds a 63% share to AMD's 36.5%.
Nvidia chips are used in industrial and automotive design and in cars themselves. German carmaker Audi said it will use Nvidia GPUs in the navigation and entertainment systems in all its 2010 model cars. Before, Audi used Nvidia chips only in its Q5 model. Nvidia is poised to benefit from getting its chips into tablets and autos, Suji De Silva, an analyst at Kaufman Brothers, wrote in a Dec. 30 research note. De Silva rates Nvidia a "buy" and expects the shares to rise to 22.
Intel has been working on GPU GPU: see secret police.
(Graphics Processing Unit) A specialized logic chip devoted to rendering 2D or 3D images. Display adapters contain one or more GPUs for fast graphics rendering. technology of its own. It recently suffered delays and scaled back a GPU chip code-named Larrabee. Intel plans to discuss other GPU technology later this year. The Federal Trade Commission has accused Intel of attempting to thwart competition from Nvidia in the graphics chip market. Intel denies the allegation.