Oak Ridge National Laboratory announced plans for a new supercomputer that will use the Fermi chips, accelerating Nvidia's initiative to use graphics processors as multicore general-purpose CPUs. Bloomberg, Cray, Dell, Hewlett-Packard, IBM and Microsoft also expressed support for the chip.

Fermi will be the basis for all Nvidia's future graphics processors. Nvidia is slightly behind archrival Advanced Micro Devices which just started shipping products based on a new graphics core designed by the former ATI group it acquired, according to a report in the Wall Street Journal.

The announcement comes a week after Intel held its annual developer's forum in San Francisco. At the event, Intel conducted classes on a new floating point architecture for its next-generation SandyBridge processors and said it will hold a developers summit soon for its multicore Larrabee graphics processor based on the x86 core.

Fermi will be able to support real-time ray tracing, Nvidia said. Intel showed early demonstrations at its event last week of ray tracing running on an early version of its Larrabee chip.

"During the last year, [Nvidia has] been battered by the competition, [and] the company is now facing new and potentially stronger competition in its traditional markets, so it has to find big opportunities," said Jon Peddie, principal of Jon Peddie Research.

Nvidia's drive to get its chips adopted in high-performance computers like the Oak Ridge system will be good for the company and its users, providing performance increases and lower costs, said Peddie.

"However, the HPC market is highly fragmented, [and] Nvidia will have to win each oil and gas application, each cancer scanning application, and each architectural or automotive image creation application separately," he said. "That may stretch the company's resources; however, I believe word will travel and new customers will seek Nvidia's solution," he said

The effort also forces Nvidia to create "a whole infrastructure from education to software to hardware, and even application assistance," Peddie added. So far "none of the competition has yet put together the whole infrastructure that Nvidia has assembled so that will buy them the time needed to get established," he said.

"Fermi is a true game-changer for GPU computing, allowing NVIDIA to compete directly against Intel and AMD processors in markets such as high performance computing and financial analysis," said Peter Glaskowsky, a microprocessor analyst.

"I think we'll have to wait and see how Fermi stacks up against ATI graphics for gaming," Glaskowsky added. "If ATI ships a lot of its new chips for the holiday buying season, Nvidia can't really expect consumers to wait.