Each year at the Hot Chips conference, many of the world's top chip firms present details of current and next-generation high performance processor designs. This year, NVIDIA (NASDAQ:NVDA) will be presenting the very first details of its custom-designed, ARM-compatible processor known as Project Denver. 

What is Project Denver?
Most mobile applications processors for smartphones and tablets use the Cortex A processor family that ARM Holdings (NASDAQ:ARMH) has available for licensing. These CPU cores come in low-end flavors (Cortex A7, Cortex A53) for very cost-sensitive chip designs and span all the way to high-end designs (Cortex A15, Cortex A57) for companies looking to offer higher-performance system-on-a-chip products. 

However, when an ARM licensee wants to aim for a different performance, power, or area point, which will be determined by the application, that company can take out what's known as an architectural license. This allows the licensee to build a processor that will run the same code as a standard ARM core but will make different design choices than what the ARM teams made. 

The "custom core" buzz
Often there is a lot of talk that only those companies that design their own CPU cores can truly differentiate themselves in the mobile market. There is certainly value in developing a custom core if your design point is radically different from the stock ARM cores and if you can justify the steep R&D expense associated with a high-performance processor core.

Keep in mind, though, that all designs have trade-offs in terms of performance, power, and area, so what is a perfectly suitable processor for one usage may be completely unsuitable for another. 

How Denver seems to differ from Cortex A57
In this case, given the limited information we know so far, NVIDIA seems to be aiming at relatively high per-core performance with Denver. This is evidenced in the fact that the 64-bit variant of NVIDIA's Tegra K1 will sport just two Denver cores rather than the four ARM Cortex A15 cores found in the 32-bit variant of Tegra K1, sacrificing the "quad core" marketing point.

It will be interesting to see what performance, power, and area the Denver core is targeting, particularly as this processor was initially pitched as a more PC and high-performance computing-oriented design, rather than a mobile-first one. 

Foolish bottom line
Just doing a custom CPU core isn't going to fundamentally change the game for NVIDIA -- the CPU is only one component of a modern system on a chip. However, if NVIDIA ends up offering the highest per-core performance of any merchant ARM chip within a mobile-friendly power envelope, then the 64-bit variant of the company's Tegra K1, which is already compelling in its 32-bit flavor, would be a very attractive choice for premium tablets and potentially smartphones.

Ashraf Eassa owns shares of ARM Holdings. The Motley Fool recommends Apple and NVIDIA and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.