Nvidia to get Pentium 4 licence via IBM?

Dom · Aug 30, 2003, 05:54 AM

AN ANALYST CLAIMS that graphics firm Nvidia won't need to go cap-in-hand to Intella herself but can obtain a Pentium 4 licence via IBM.

According to SIG Equity Research, confirming earlier speculation, Nvidia could announce its Intel chipset as early as the first quarter of 2004.

But, said the firm in a report to its customers, Nvidia may not need to get its licence direct from Intel, but because of its manufacturing agreement with IBM could get a front side bus licence as Big Blue is close to Intel as well.

That way, reckons the firm, Nvidia could miss out paying the $5 royalty everyone else has to pay, but would have to make its chipsets using the IBM foundry.

This is an interesting theory but we wonder if it holds water? We kind of doubt it. The relationship between Nvidia and IBM Microelectronics is one thing. And a relationship between IBM and Intel is another thing. If Nvidia was allowed to short circuit the process, Intel would likely face some interrogation from other people that pay the licence – not least ATI.

Joe D'Elia, senior microprocessor analyst at iSuppli, said: "This was exactly the way that Cyrix was able to bypass Intel licences in the past. Its foundries were Texas Instruments, IBM and ultimately STMicro and they all had/have cross licensing agreements with Intel. This didn't stop Intel taking them to court which eventually found in Cyrix's favour so the legal precedent is there".

Meanwhile, SIG Equity Research claims that Nvidia has "lost momentum" because of strong competition from Via with the KT600 which is lower in price. It estimates the average selling price for Nforce 2 is about $24 for the high end chipset, while Via undercuts it.

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Source: TheInquirer

WaltC · Aug 30, 2003, 01:05 PM

I agree this seems unlikely. Even if they did use the license through IBM, they'd still have to pay the $5 (which IBM would have to pay, and simply pass along to nVidia.) Usually this kind of deal is attempted when a competitor is trying to license something the licensee doesn't wish it to have, and working through another company's license is a way to circumvent the restriction. I can't see that Intel would mind giving nVidia a bus license any more than it minds giving it to SiS and anybody else who wants one (AMD being the only restriction I'm aware of.) As far back as I can recall, nVidia's always balked at the $5 licensing fee, which indicates to me that nVidia doesn't feel it could be cost competitive with Intel and the other P4 bus licensees and absorb the $5-a-pop at the same time.

Also, I believe the nVidia CEO reiterated just recently in a conference call that the company had no plans for a P4 chipset.

Aug 30, 2003, 05:54 AM	#1
Dom DriverHeaven Extreme Member Join Date: Jun 2002 Posts: 12,940 Rep Power: 0	Nvidia to get Pentium 4 licence via IBM? AN ANALYST CLAIMS that graphics firm Nvidia won't need to go cap-in-hand to Intella herself but can obtain a Pentium 4 licence via IBM. According to SIG Equity Research, confirming earlier speculation, Nvidia could announce its Intel chipset as early as the first quarter of 2004. But, said the firm in a report to its customers, Nvidia may not need to get its licence direct from Intel, but because of its manufacturing agreement with IBM could get a front side bus licence as Big Blue is close to Intel as well. That way, reckons the firm, Nvidia could miss out paying the $5 royalty everyone else has to pay, but would have to make its chipsets using the IBM foundry. This is an interesting theory but we wonder if it holds water? We kind of doubt it. The relationship between Nvidia and IBM Microelectronics is one thing. And a relationship between IBM and Intel is another thing. If Nvidia was allowed to short circuit the process, Intel would likely face some interrogation from other people that pay the licence – not least ATI. Joe D'Elia, senior microprocessor analyst at iSuppli, said: "This was exactly the way that Cyrix was able to bypass Intel licences in the past. Its foundries were Texas Instruments, IBM and ultimately STMicro and they all had/have cross licensing agreements with Intel. This didn't stop Intel taking them to court which eventually found in Cyrix's favour so the legal precedent is there". Meanwhile, SIG Equity Research claims that Nvidia has "lost momentum" because of strong competition from Via with the KT600 which is lower in price. It estimates the average selling price for Nforce 2 is about $24 for the high end chipset, while Via undercuts it. _______________________ Source: TheInquirer

Aug 30, 2003, 01:05 PM	#2
WaltC DriverHeaven Addict Join Date: May 2003 Location: Deep in Martian soil where it's warm and the air is good Posts: 245 Rep Power: 0	I agree this seems unlikely. Even if they did use the license through IBM, they'd still have to pay the $5 (which IBM would have to pay, and simply pass along to nVidia.) Usually this kind of deal is attempted when a competitor is trying to license something the licensee doesn't wish it to have, and working through another company's license is a way to circumvent the restriction. I can't see that Intel would mind giving nVidia a bus license any more than it minds giving it to SiS and anybody else who wants one (AMD being the only restriction I'm aware of.) As far back as I can recall, nVidia's always balked at the $5 licensing fee, which indicates to me that nVidia doesn't feel it could be cost competitive with Intel and the other P4 bus licensees and absorb the $5-a-pop at the same time. Also, I believe the nVidia CEO reiterated just recently in a conference call that the company had no plans for a P4 chipset.