Tech Blog

Nvidia’s acquisition of Icera on Monday for $367m completes the chipmaker’s transition from a PC-focused graphics chipmaker to one built to challenge in the post-PC world that Apple likes to talk about so much.

It also deals another blow to Texas Instruments, once the leading wireless chipmaker but now one that prefers to emphasise its strength in analogue chips.

Analysts point out that TI was a customer of the UK’s Icera for the baseband chips that process communications functions in phones and is now one of the only companies left that has an applications processor business without any internal baseband support, Nokia being another.

“While Icera claims that it will continue working with existing partners, this definitely creates a problem for TI, which exited the baseband business in the 2009/2010 timeframe,” says Jim McGregor, chief technology strategist at the in-Stat research firm, in a report.

“Not only does this eliminate one of the potential independent baseband partners, it makes partnering with the remaining suppliers more difficult.”

Icera was the only remaining independent supplier with a solution that supported both 3G and 4G standards, he explains.

He points out that Nvidia’s Tegra 2 application processor lacks an integrated baseband chip that would allow it to compete better in smartphones, where the main player Qualcomm has its Snapdragon applications processor well integrated with its own wireless chips.

With Intel completing its $1.4bn purchase of Infineon’s wireless division in January to add its baseband chips, the competitive landscape has changed significantly this year.

Nvidia’s dual-core Tegra 2 has been out in front in tablets – it is in the Motorola Xoom, LG Optimus Pad, Samsung Galaxy Tab 10.1 and Sony’s upcoming S1 and S2 tablets, to name just a few.

It is less well represented in smartphones, but features in “super phones” such as the LG Optimus 2X and Motorola Atrix 4G.

With Nvidia due to move to quad-core Arm-based chips well ahead of the competition, the addition of Icera’s technology will make it a formidable competitor in tablets, smartphones and new growth segments such as in-car systems.