Nvidia won't build chipsets for Intel's Nehalem

SAN FRANCISCO—Graphics chip vendor Nvidia Corp. has halted development of chipsets for next-generation Intel processors that feature the direct media interface (DMI) bus, pending the outcome of current litigation between the two companies, Nvidia said Thursday (Oct. 8).

Jon Peddie, principal of Jon Peddie Research, downplayed the significance of Nvidia's statment, saying Nvidia has never said that it would build chipsets for Intel's DMI architecture.

Intel (Santa Clara, Calif.) in February filed a suit against Nvidia (Santa Clara, Calif.) alleging that a four-year-old chipset license agreement between the two companies did not cover Intel's next-generation processors with integrated memory controllers, such as Intel's Nehalem processor.

Nvidia maintains that the license does cover the newer technology. The company later countersued Intel, alleging breach of contract.

Nvidia expects the litigation, currently before Delaware's Court of Chancery, to conclude next year, according to a prepared statement circulated by an Nvidia spokesperson Thursday.

"Because of Intel's improper claims to customers and the market that we aren't licensed to the new DMI bus and its unfair business tactics, it is effectively impossible for us to market chipsets for future CPUs," Nvidia said. "So, until we resolve this matter in court next year, we'll postpone further chipset investments for Intel DMI CPUs."

Nvidia develops chipsets for Intel processors that employ a front side bus (FSB) architecture and also develops chip sets for AMD processors that use that company's HyperTransport technology, Peddie said. He added that since Nehalem is Intel's answer to AMD's HyperTransport, Nvidia could adapt one of its existing chipsets to support it.

But Nvidia has never announced any intention to do so, Peddie said, and with the pending litigation it is unclear whether it has the right to.

"The sidebar on this is that by the time this [license issue] gets resolved in court, Intel will have moved to processors that have embedded the graphics," Peddie said. "Then the whole thing becomes moot."

A spokesperson for Intel said there have been no new developments in the litigation between the two companies and that the two continue to disagree about what their 2004 license agreement says. "Nvidia's decision [to halt development on some chipsets] is based on their business needs," the spokesperson said.

Nvidia said it will continue to create and sell new chipsets for Intel's FSB architecture, saying it believes this market has a long and healthy life ahead.

Intel rolled out its Core i7 family, also known as Nehalem, last November.