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4. Intel Wants Court to Ban Nvidia from Making Chipsets for Latest Processors

Intel Corp. in mid-February said that it had filed a lawsuit against Nvidia Corp. in order to ban Nvidia from making and selling its nForce or GeForce chipsets compatible with Intel’s processors featuring integrated memory controller.  Intel also accused Nvidia of breaching their mutual agreement by claiming that it does have license to make chipsets compatible with Intel Core i7 microprocessors that use quick-path interconnect (QPI) bus to connect to other components of the system as well as for other similar processors.

“Intel has filed suit against Nvidia seeking a declaratory judgment over rights associated with two agreements between the companies. The suit seeks to have the court declare that Nvidia is not licensed to produce chipsets that are compatible with any Intel processor that has integrated memory controller functionality, such as Intel's Nehalem microprocessors,” said Daniel Snyder, a spokesman for Intel.

“At the heart of this issue is that the CPU has run its course and the soul of the PC is shifting quickly to the GPU. This is clearly an attempt to stifle innovation to protect a decaying CPU business,” claimed Jen-Hsun Huang. 

Nvidia has been providing advanced chipsets for Intel platform for about five years now and in many cases its chipsets were better for overclocking of microprocessors. The actual reason of their popularity was support for Nvidia multi-GPU SLI technology and the only reason why Nvidia SLI was not available on other platforms was because Nvidia blocked it from the drivers. But it was not chipset business that was the motive of the conflict between Intel and Nvidia. The reason why both companies initiated the dispute is graphics processing units and rasterization.

In early April, 2008, Patrick Gelsinger, senior vice president and general manager of Digital Enterprise Group at Intel said that current rasterization-based 3D graphics rendering technology was no longer suitable for new challenges and that CPUs could be faster.

“First, graphics that we have all come to know and love today, I have news for you. It’s coming to an end. Our multi-decade old 3D graphics rendering architecture that’s based on a rasterization approach is no longer scaleable and suitable for the demands of the future. And we can do much better,” said Mr. Gelsinger in front of a huge auditory at Intel Developer Forum in Shanghai, China. Mr. Gelsinger referred to the fact that Intel's Larrabee graphics processors can do both rasterization as well as ray-tracing, another method of rendering that cannot be efficiently handled by modern GPUs and CPUs.

Patrick Gelsinger holding a wafer with Larrabee GPUs at IDF 2009

While Mr. Gelsinger did not state that there will be no need for a separate graphics accelerator in a PC, his colleague Ron Fosner, a graphics and gaming technologist at Intel, said that in several years time people “probably won’t” need discrete graphics cards.

Nvidia was quick to respond its much larger rival with promises made by chief executive Jen-Hsun Huang to open up “a can of whoop ass” on Intel and then state that the central processing unit was “dead”.

Jen-Hsun Huang, Image by AP/

“Basically the CPU is dead. Yes, that processor you see advertised everywhere from Intel. It runs out of steam. The fact is that it no longer makes anything run faster. You don’t need a fast one anymore. This is why AMD is in trouble and it’s why Intel are panicking. They are panicking so much that they have started attacking us. This is because you do still [need] one chip to get faster and faster – the GPU. That GeForce chip,” said the head of Nvidia to analysts.

A year after Nvidia said the x86 microprocessor was dead it nearly lost AMD CPU-compatible chipset business and is about to lose Intel CPU-compatible core-logic business. In fact, chipset revenue still represents about 20% of Nvidia’s earnings and are over $100 of million. As a result, by now rhetoric of Jen-Hsun Huang and Nvidia has changed dramatically even from the claims made several months ago.

“CPU-GPU co-processing is the future of computing,” Mr. Huang said at a meeting with financial analysts in June, 2009.

“The core-processing is the present and the future of PC world,” he added in another interview.

Perhaps, after Intel filed a lawsuit, Nvidia still hopes that it can find a way to capitalize somehow on Intel platforms?

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