Analyst: Nvidia will quit chipset biz in 2009

Rumours restoked

By Tony Smith • Get more from this author

Posted in PC Builder, 7th October 2008 10:16 GMT

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Nvidia is again facing a claim that it's going to get out of the chipset business, this time from US investment house Pacific Crest Securities.

PCS analyst this week told investors that "our checks confirm that Nvidia has decided to exit the chipset market next year", despite the fact that the product line will account for nearly a quarter - 21 per cent - of the company's revenues in the current fiscal year.

Claims that Nvidia was planning to stop selling chipsets first surfaced in August after it was alleged Nvidia representatives had met the company's motherboard-maker customers to sound them out on such a move.

Nvidia quickly denounced the claim as "completely groundless", stating that it has “no intention of getting out of the chipset business".

Nvidia said that its media and communication processors (MCP) unit is “as strong as it has ever been for both AMD and Intel platforms”.

Maybe, but it's also the case that it's getting harder to sell chipsets in the Intel-based PC arena, thanks to Intel's aggressive development and marketing of its own chipset product lines. AMD was always been more 'open' to third-party chipset makers - until, of course, it bought chipset maker ATI, and now it too is seen as being keen to explicitly link its CPUs with its own chipsets.

All this is why VIA signaled its intention to stop making chipsets for PCs and instead focus its system-logic efforts on its own processors.

In August, shortly after the Nvidia allegations and counter-claims were made, Richard Brown, VIA's marketing chief, said: "We believed that ultimately the third-party chipset market would disappear... That has indeed come to pass."

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