NVIDIA (NVDA 3.65%) 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 (TSM 2.84%) 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 (INTC -0.38%) 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 (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.
