CHIP DESIGNER Nvidia has announced it will buy the British 3G and 4G baseband chip firm Icera.
Nvidia announced the $367m cash deal to acquire Icera as part of its strategy to push deeper into the smartphone and tablet market. Nvidia ditched its line of embedded graphics processors to concentrate on its Tegra line of system-on-chip processors and with the addition of Icera it can look to peddle baseband chips as well Tegra processors in the future.
Baseband chips connect the phone to the network and as bandwidths increase, the performance of baseband chips becomes even more critical. Nvidia has already said it hopes that manufacturers will be further swayed to choose its Tegra chips now that Nvidia can supply both application and baseband processors.
It was recently reported that Nvidia suffered significant market share decline due to its decision to stop designing integrated graphics chips. The firm had decided to concentrate on the growing smartphone and tablet market, and while Tegra had a slow start, smartphones and tablets are now arriving thick and fast.
Both Nvidia's CEO Jen-Hsun Huang and Icera's CEO Stan Boland said the right words, complimenting each other's capabilities and generally promoting the deal. However, Huang said that Nvidia will continue to work with other baseband chip firms.
On the whole it is not surprising to see Nvidia go into the baseband chip business, after all its Tegra chip has been picking up good reviews and few would argue against going big in the rapidly growing smartphone and tablet markets. This deal will mean that Nvidia will be going toe-to-toe with the mobile chip industry leaders Qualcomm, Texas Instruments, Broadcom and Freescale.
While Huang left the door open for other baseband chip firms to do business with Nvidia, it is clear that in the long term, Nvidia will want to integrate as much of Icera's technology into its Tegra line of chips as possible and take more of the mobile chip business from its larger rivals. µ