Market Watch

Intel and NVIDIA Settle Litigation


Display Driver IC Forecast


Intel Corporation and NVIDIA, a graphics processing unit (GPU) and chipset technology company, have agreed a 6 year cross-licensing deal. The agreement will see Intel receive continuing access to all of NVIDIA's patents, whilst in return NVIDIA will receive $1.5 billion and have the right to use select Intel patents, excluding those relating to central processing units (CPU), flash memory and specific chipsets. The two companies have been engaged in lawsuits against each other since February 2009, but the new deal sees all existing legal disputes between the parties settled.

Analysis
This settlement represents a mutually beneficial resolution to the legal disputes that have embroiled Intel and NVIDIA. By securing access to Intel patents, NVIDIA have ensured that they will be able to continue building Intel-compatible GPUs, a core part of their current business, whilst additionally receiving a significant injection of money. From Intel's perspective, the availability of all NVIDIA patents will be an invaluable resource as they continue embedding graphics processing within their CPUs.

The cross-licensing deal between Intel and NVIDIA reflects the growing shift towards integrated CPU-GPU chips. Whilst these single-chip solutions may not yet contain quite the graphics capabilities of external GPUs, the benefits lie in the long-term use - a reduction in total cost and size, with increased CPU efficiency. Intel have already released several such integrated GPU microprocessors under the Atom and Core brands, whilst NVIDIA's Tegra processor powers a range of smartphones and tablets. Additionally, NVIDIA and ARM plan to release an integrated CPU-GPU chip for computers, expected in 2013.

This migration towards single-chip solutions is both relevant to, and necessitated by, the demand and development of the consumer electronics (CE) industry. As HD and 3D content flourishes and interoperability between devices entails more powerful transcoding, CE manufacturers require more powerful graphics capabilities. Integrated GPU chips are a solution that potentially save both space and money, and can thus drive down prices and increase uptake of new technologies for CE devices such as set-top boxes and smartphones.

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