updated 09:02 pm EDT, Tue June 18, 2013
Move intended to move Nvidia products into more mobile devices
Marking a sea change in the company's plan, Nvidia CEO Jen-Hsun Huang has declared that his company will license new graphics processing technologies to other companies, in addition to manufacturing the chips themselves. The new move is expected to help Nvidia capitalize on the industry shift to smartphones and tablets and achieve wider market penetration of its products.
"The bottom line is the world has changed and we're expanding our business model to serve markets that we historically could not serve by selling chips alone," Huang said during the Reuters Global Technology Summit in San Francisco.
"This is a way for us to engage customers who don't like to buy chips because they like to create their own, because they have the capacity, creativity and now the scale to build their own," he said, likely referring to Apple and Samsung, powerhouses of the mobile industry.
The first chipset to be licensed will be the new Kepler architecture, used in the currently shipping GeForce, Quadro, and Tesla GPUs. Kepler is also the core of the next-generation Tegra mobile processor codenamed "Logan." Huang believes that revenue from licensing will fall far behind chip sales for many years, with an increase in gross margins as the company is paid royalties from channels it does not currently service.
An official Nvidia blog post marking the new initiative claims that the company invests "more in R&D in this area than any other company in the world - over $1 billion annually and more than $6 billion since our founding." The company holds more than 5,500 patents related to graphics processing.