Intel goes to court in licensing spat with Nvidia

Nvidia says its license with Intel still stands

Intel Corp. went to court this week to resolve a licensing dispute with Nvidia Corp. over the latter's plan to build chip sets compatible with Intel's latest Nehalem processors.

In a filing in the State of Chancery Court in Delaware, the chip maker on Tuesday asked a judge to rule that Nvidia is not licensed to produce chip sets that are compatible with any Intel processors with integrated memory-controller functionality, such as Intel's Nehalem microprocessors.

Intel launched its first Nehalem chips in November, when it introduced the Core i7 chips. The new chips integrate memory controllers inside the chip, which helps the CPU communicate with the memory faster. Future Intel laptop and desktop processors are also expected to include integrated memory controllers.

Intel had discussions with Nvidia for more than a year attempting to resolve the matter, but the talks were unsuccessful, said Intel spokesman Chuck Mulloy. Intel had to go to court to resolve this dispute, Mulloy said.

In response to the court filing, Nvidia on Wednesday said that a four-year-old bus license with Intel allowed it to build chip sets based on Intel CPUs with integrated memory controllers.

"We are confident that our license, as negotiated, applies," said Jen-Hsun Huang, Nvidia president and CEO, in a statement.

The license revolves around usage of a bus, or point-to-point interconnect, that helps the CPU communicate with components in a PC. Nvidia is "aggressively developing" new products for Intel's current interconnect and Intel's future DMI (direct media interface) bus.

Nvidia makes chip sets -- a set of integrated circuits -- for Intel and for Advanced Micro Devices Inc.'s CPUs to help processors communicate with components like network and storage controllers.

As CPUs integrate more capabilities like graphics, Intel may be trying to gain more control over its future chip technology, said Nathan Brookwood, an analyst at Insight64. Intel plans to integrate graphics in a two-chip package it is expected to start shipping later this year.

"Intel [could] be saying 'We gave you some technology to go into old processors ... now we're not going to let you do that anymore,'" he said.

But Nvidia CEO Huang said Intel's CPU business is decaying, and the court filing is an attempt to save it.

"At the heart of this issue is that the CPU has run its course and the soul of the PC is shifting quickly to the [graphics processing unit]. This is clearly an attempt to stifle innovation to protect a decaying CPU business," Huang said.

Nvidia is trying to push GPUs as an alternative to CPUs, because GPUs execute advanced tasks like video encoding and decoding much quicker. It is also pushing the CUDA parallel programming architecture, a software tool kit that allows programmers to take advantage of the processing speeds of GPUs.

Both CPUs and GPUs are important and neither is going away soon, Brookwood said. However, CPUs are gaining more importance with GPUs taking on the role of a subordinate on laptops and desktops.

"Nvidia basically for the last year has been arguing that all the hard work is in the GPU and nobody's going to care about the CPU. Intel's been going in the opposite direction," Brookwood said.

As better graphics capabilities are integrated into CPUs, a smaller number of buyers will pay extra for a separate graphics card. That strikes at the heart of Nvidia, which is known for its graphics cards. The general computing trend is not on Nvidia's side, which is already facing a problem on how to grow its discrete graphics business during the recession, Brookwood said.

Copyright © 2009 IDG Communications, Inc.

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