Is NVIDIA's Mobile Graphics Greatness at Risk?

NVIDIA (NASDAQ: NVDA  ) had better watch its back -- a new high-tech collaboration is threatening to undermine the chip maker's dominance in mobile graphics.

Yesterday, Taiwan Semiconductor (NYSE: TSM  ) and British chip designer Imagination Technologies agreed to work together to design 3-D transistors based on Imagination's PowerVR graphics processors. Imagination already has its Samsung-built PowerVR chips in most of Apple's mobile devices, as well as in Apple TV, and has also gained placement in a number of Samsung devices as well. The next-gen PowerVR chips are expected to use a 16-nanometer transistor width, which is nearly half the size of NVIDIA's current 28-nanometer process, which will run at least through the end of this year.

Intel (NASDAQ: INTC  ) also makes use of the PowerVR architecture in some of its devices, and both the chip maker and Apple hold stakes in Imagination. Intel first developed 3-D transistors, which are manufactured with FinFET technology, two years ago, and is slated to drop down to a 14-nanometer transistor width this year. Using the new PowerVR chips in conjunction with its own optimized mobile offerings could provide Intel with a slim edge over ARM Holdings (NASDAQ: ARMH  ) in the mobile space, and could also hold off NVIDIA, which plans to continue using an optimized system-on-a-chip design combining both central processing and graphics on its upcoming Tegras.

The only upside here for NVIDIA and other ARM-focused chip makers is that Taiwan Semiconductor hasn't offered a release date for the FinFET PowerVR chips. A year or two might be enough of a lead to keep Intel and Imagination on the fringes, thus minimizing interest from mobile device makers (and app developers) that would put the ARM architecture completely beyond challenge.

NVIDIA was ahead of the curve launching its mobile Tegra processor, but investing gains haven't followed as expected, with the company struggling to gain momentum in the smartphone market. The Motley Fool's brand-new premium report examines NVIDIA's stumbling blocks, but also homes in on opportunities that many investors are overlooking. We'll help you sort fact from fiction to determine whether NVIDIA is a buy at today's prices. Simply click here now to unlock your copy of this comprehensive report.

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  • Report this Comment On March 31, 2013, at 7:54 AM, GoodGrief2 wrote:

    "NVIDIA had better watch its back -- a new high-tech collaboration is threatening to undermine the chip maker's dominance in mobile graphics."

    Dominance? What devices currently ship Tegra chips? And in what volumes?

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