Nvidia looks to mobile chips for growth

08.05.2009
Graphics hardware vendor Nvidia saw its revenue drop during the first quarter of 2010 but is pinning its hopes on mobile devices for growth during the recession.

Revenue was US$664.2 million for the first quarter ended April 26, a 42 percent drop from $1.2 billion during the first quarter of fiscal 2009. However, revenue exceeded the consensus forecast of $562 million from analysts polled by Thomson Reuters.

The company also recorded a loss of $201 million, or $0.37 per share, compared with a profit of $176.8 million a year earlier. The loss included charges of $140.2 million related to the purchase of employee stock options.

Nvidia is trying to push into new markets as it looks for ways to get through the recession, said Jen-Hsun Huang, Nvidia's CEO, during a conference call to discuss the financial results. Nvidia, traditionally known as a graphics card vendor, is set to supply CPUs and graphics chips for smartphones and netbooks in the upcoming fiscal quarters.

Nvidia will deliver CPUs for smartphones with its Tegra low-power processors, which bundle Arm-based processor cores with GeForce graphics cores on a single chip. Tegra should put Nvidia in direct competition with Intel, which offers low-power Atom processors for smartphones. The company has about 500 people dedicated to developing Tegra chips, Huang said.

Nvidia also hopes to dip into the burgeoning netbook market with its Ion platform, a package of chips that brings high-definition graphics to low-cost PCs. During the first quarter, the Ion platform was implemented by Acer in the AspireRevo nettop, a small desktop the size of a hardcover book. Nvidia hopes to put Ion in netbooks as well, though no products built around the platform have been announced yet. The Ion platform pairs Nvidia's GeForce 9400M GPU with Intel's Atom CPU.