Why Qualcomm Isn't Afraid of NVIDIA

Mobile-chip giant Qualcomm (Nasdaq: QCOM  ) recently saw smaller rival NVIDIA (Nasdaq: NVDA  ) butt in on one of its long-standing relationships, with Taiwanese gadget-maker HTC. NVIDIA has technically beaten Qualcomm to the punch by reaching quad-core turf first; should Qualcomm be afraid that NVIDIA's invasion will continue?

Not quite. Not yet.

Scoring half of the design win within the HTC One X is a start, and that trend may continue, but right now Qualcomm still has a major lead. At the Mobile World Congress, The Verge recently interviewed Raj Talluri, Qualcomm's head of application processors (including its Snapdragon family) and he added a lot of context to how the two chipmakers' approaches differ -- and why Qualcomm's is better.

Integration is king
There are some advantages that Qualcomm has long boasted over NVIDIA with Qualcomm's specialty in integration. The dual-core Snapdragon S4 that the company is showing off is the only mobile processor on the market that has 4G LTE integrated directly into its chipset. NVIDIA is working to close that gap and bake LTE support directly into its Tegra 3 by year's end.

The S4 is also built on a 28-nanometer processor compared to the Tegra 3's 40 nanometers, which allows the S4 additional power-efficiency advantages. Talluri also highlighted another key advantage that isn't discussed as frequently: Qualcomm has also integrated Wi-Fi, Bluetooth, FM, and GPS directly into the chip. Wi-Fi integration is something that Intel (Nasdaq: INTC  ) is already working on for its mobile chips, along with building its mobile forces.

Who needs a fifth core?
NVIDIA's quad-core Tegra 3 actually carries a fifth "Companion" core -- which the company now affectionately refers to as a "Ninja core" -- and 4+1 architecture. The reason for its inclusion is to handle processing tasks that don't need as much computing horsepower.

Talluri explains that unlike other ARM Holdings (Nasdaq: ARMH  ) licensees, Qualcomm doesn't license the CPU core directly. Instead, it licenses only the instruction set, which ensures software compatibility and more, but then builds the processor "from scratch." Each core can be controlled independently, thanks to how Qualcomm designs its memory systems and caches, while the competition has to run all cores at the same clock speeds.

Each Snapdragon core can throttle up and down as needed in a power-efficient manner, so if you throw a low-power task at the chip, it just powers up one of the cores to the necessary speed and gets the job done. This custom approach means that Snapdragons don't need that extra core, and they're better optimized for mobile uses.

On top of that, most apps out there nowadays aren't optimized to fully tap into the potential of all those extra processing cores. This will change eventually as all smartphones migrate to quad-cores, but for now only a handful of apps really utilize the extra power.

A numbers game
The benchmark figures speak for themselves. Anandtech pit the Snapdragon S4 against over a dozen current offerings, including heavyweights like the Apple iPhone 4S, Motorola Mobility Droid 4, Samsung Galaxy Nexus, and Asus Transformer Prime tablet, which sports a Tegra 3.

The S4 trounces the competition by a wide margin in almost every category. The Tegra 3 narrowly took one test, but the S4 took the gold in the other three, and we're talking about a dual-core chip outperforming a quad-core.

Pick your poison: LTE or Tegra 3
Right now, Tegra 3 and LTE don't play well together, which is why it scored only half of the design win in the HTC One X. The iteration destined for the US carries the Snapdragon with integrated LTE support, since Verizon and AT&T effectively require LTE for high-end smartphones currently.

That means that the Tegra 3 is missing out on much of the juicy U.S. market for the time being, but it will be in the international version of the One X. This won't be the case for too long though, since NVIDIA is working with GCT Semiconductor and Renesas Mobile, not to mention its $367 million Icera acquisition last year, to literally get up to speed.

Safe … for now
As it stands, Qualcomm still has the technological lead over NVIDIA, although NVIDIA is working pretty aggressively to close that gap. NVIDIA just scored its first application processor and discrete baseband win, but it has a way to go before it can start earning a more meaningful share. If it does, NVIDIA investors will be rewarded handsomely, as the company's most promising growth prospects are baked right into its mobile chips.

These two chip players are just some of the winners of the mobile revolution. For even more companies that are cashing in from the inside, don't miss our new report on "3 Hidden Winners of the iPhone, iPad, and Android Revolution." Get the report now -- it's free.

Fool contributor Evan Niu has sold bullish put spreads on QUALCOMM and owns shares of Apple, AT&T, Verizon Communications, and ARM Holdings, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio.

The Motley Fool owns shares of QUALCOMM, Intel, and Apple. Motley Fool newsletter services have recommended buying shares of Intel, Apple, and NVIDIA; writing puts on NVIDIA; and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (6) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 29, 2012, at 11:00 PM, jdwelch62 wrote:

    Don't get hung up on the number of cores on a chip, folks. As Evan points out, the dual-core Qualcomm outperformed the quad-core NVIDIA chip. It's not size that matters, it's performance (and power consumption)... :-)

  • Report this Comment On March 01, 2012, at 4:20 AM, DavidMcT wrote:

    To correct a factual error. The only single die communications processor that supports Cat-4 triple mode LTE and contains an applications processor that is available today is from Renesas Mobile. Qualcomms device uses stack dies which results in higher power consumption and higher cost.

  • Report this Comment On March 01, 2012, at 10:39 AM, winklerf wrote:

    Quite frankly, the premature jump by ARM to multiple cores in their designs reveals how little they understand computing. Multiple cores will always be always be less capable of converting potential computational power into actual results because you either need very complex code or multiple processes using the same amount of resources. There is a reason it took so long for x86 to get into multiple cores on a platform that has a far greater need for multiprocessing than mobile does. A higher performance single core will almost always beat two weaker cores and will use less die space, thus less expensive to produce.

    ARM is mostly providing the poor man's version of dynamic clock management by providing multiple cores that run at a set clock rate or go into hibernation instead of having a large number of possible clock settings based upon processor load. This is just one of the reasons why chip producers that use stock ARM IP will be lagging the likes of Qualcomm and Intel when it comes to the performance their chips actually deliver in the product.

  • Report this Comment On March 01, 2012, at 2:20 PM, GOBOSH wrote:

    One can only deduce from the posts coming out of MWC that QCOM is indeed afraid of Nvidia's growing capabilities. Nvidia does not have the breath of product that QCOM has (yet), but they are producing quality, high performance processors (modems soon), at a prodigious clip. My grandfather flew bombers in WWII, he used to say when the flak got heavy, you were over the target. Well, QCOM was throwing up a lot of flak at Nvidia this week.

    When comparing the Tegra 3 vs MSM8960/8660 (same processor), make sure you review the results of the HTC One X with Tegra 3 vs. One X with 8660, NOT the bogus test that QCOM was pushing showing a QCOM reference tool set to max performance vs. a commercially available Tegra 3 device you can pick up a Best Buy. I think you will see the Tegra more than holds its own. And, oh BTW,Tegra 3 will have been commercial for 6 months by the time you will be able to buy a 8960 device. No one is pointing that out.

  • Report this Comment On March 01, 2012, at 2:47 PM, winklerf wrote:

    Tegra is vanilla ARM Cortex A9 on TSMC 40nm lp, which takes very little engineering capability to do. There is absolutely no differentiation (no, the baby core doesn't count) for this product outside of GPU, which will not make your browser or most apps run better. The results of the Qualcomm device should be taken with a grain of salt, but they are also engineering samples that don't represent what will be a better performing final product either. The point is that nVidia isn't a real player yet in the mobile processor space, especially when very capable PowerVR GPU IP is available.

  • Report this Comment On March 01, 2012, at 9:13 PM, GOBOSH wrote:

    For not being a real player yet, they sure are faking it pretty good. . .

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1797279, ~/Articles/ArticleHandler.aspx, 12/20/2014 5:25:33 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement