Updated at 4:40 p.m. PDT: adding to discussion of next-generation Nvidia Ion chip.
As graphics kingpin Nvidia tries to reshape itself into a broad-based computing company, it is taking big gambles with potentially big payoffs, while it fends off challenges from rivals Intel and Advanced Micro Devices.
The world's largest supplier of standalone graphics chips for PCs needs to grow. Established markets have matured and Nvidia must seek out other ways to make money.
"In almost every market they have entered they have become dominant," said Jon Peddie, president of Jon Peddie Research, which tracks the graphics chip market. "Almost 90 percent market share in the workstation business and 55 to 65 percent in the graphics business. But if you're that successful you can't really grow the market anymore, and if you want to keep growing your company, then you have to get into new markets."
Enter supercomputing and Nvidia's brand-new Fermi architecture. "That's a huge market and big margins," said Peddie. Fermi was announced last week at an Nvidia conference to great fanfare when prestigious Oak Ridge National Laboratory said it plans to use Fermi in a future supercomputer.
It would be an understatement to say that the Fermi chip potentially packs a computing wallop. The chip integrates an astounding 3 billion transistors, about three times the number of transistors in Nvidia's most powerful graphics chip now on the market, and it has been designed with features that make it more suitable for high-performance computers, the first time that Nvidia has architected a chip this way.
Fermi GPUs, each containing 512 processing cores, would enable "substantial scientific breakthroughs" that would be impossible without the new technology, Jeff Nichols, Oak Ridge's associate lab director for computing and computational sciences, said last week.
Nvidia hopes to parlay this computing power into the mainstream. (For a comparison of Fermi with AMD's newest graphics chip see: ATI and Nvidia face off--obliquely.)
"Fermi will offer Nvidia the opportunity to grow our consumer business by having the fastest raw graphics power," said Drew Henry, general manager of Nvidia's bread-and-butter GeForce graphics business. "But it's also going to expand our business by allowing people to process better video and photo applications and to use the GPU for many, many more mainstream applications." (GPU stands for graphics processing unit.)
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