Nvidia Chipsets for Nehalem Could Hamper Intel's Plans to Segment the CPU Market

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Intel Wants Nvidia Chipsets on Terms That Preserve Market Segments

Intel seems to have had enough of Nvidia chipsets. The former completely slammed the latter’s Ion platform, despite the fact it uses Intel’s Atom CPU. They have also taken Nvidia to court to prevent them from making chipsets for Nehalem CPUs under their existing license agreements.

Intel has tolerated Nvidia’s chipset completion until now, so why is there such a kerfuffle at this point? The problem with Ion, from Intel’s point of view, is that it might allow the Atom to replace a more expensive Core 2 processor in some applications. Ion interferes with how Intel has segmented the low-end CPU market.

The issues surrounding Nehalem chipsets may have similar roots. Nehalem processors will use three different sockets, and Intel is tailoring the motherboards available for each to a certain grade of processor. Nvidia chipsets could allow users features Intel doesn’t want them to have unless they buy a nicer CPU.

Intel Says they Want Nvidia Motherboards, But on Different Terms

Before we get into what we think is at stake in the lawsuit, we should point out it is just that: what we think. The court filing itself is sealed, so we really only know what Intel and Nvidia have said about it, not what is said in it. Intel has indicated they are working on a version for public consumption.

The problem is, even if we get a public version of the filing, we won’t know the first thing about the license agreement that Intel claims is being violated. The agreement under which Nvidia makes chipsets for Intel CPUs is also confidential. And even if they did have a public version of it, it would be so censored as to be pointless.

On the whole, there isn’t much to go on. Intel says Nvidia can’t make Nehalem chipsets under the existing license, Nvidia says they can. Both say they have been negotiating but the other won’t come around, and there has been a new round of comments about either the GPU or CPU becoming the dominant part of the computer, similar to what we heard last April.

The most interesting comments came out of Intel spokesperson Chuck Mulloy. Apparently, if Intel wins the lawsuit to block Nehalem chipsets from Nvidia, they are open to re-negotiation. Obviously, they would be negotiating from a stronger position if they win the lawsuit. So Intel wants Nvidia chipsets, but on their terms.

The Nehalem Chipset Lawsuit

Or, more accurately, the chipset for any Intel CPU with an on-board memory controller (which includes Nehalem and, presumably, future Intel CPUs) lawsuit, may just be an attempt to forestall an Ion situation with Nehalem processors. By using three different sockets for Nehalem CPUs, Intel is tying CPU selection to motherboard features.

The details of the Core i7/X58 and coming Ibex Peak platforms Nehalem uses are covered here. There is one point from them that stands out in terms of the contention with Nvidia, however. The X58, which supports the accompanying enthusiast Core i7 only, is the only platform to support multiple-graphics cards with a full 16 lanes of bandwidth each. The upper midrange platform, likely to be called the P5 series, can support two cards, but with only 8 lanes each.

Intel figures that if you want full-bandwidth SLI or Crossfire, you are willing to shell out for a top-end CPU. Nvidia, whose bread and butter is the GPU, obviously disagree. They want as many people as possible to buy as many GPUs as possible, and restricting SLI to those who want the best in CPUs as well, shrinks their market.

Nvidia would have a lot to gain from putting out a board with an LGA 1156 socket, which will house mid-range Lynnfield CPUs, and a full 32 lanes for SLI. For gamers, who don’t need the most multi-core CPUs available, particularly if it cuts into their graphics budget, the Nvidia would be an attractive platform.

The rub for Intel is that they would loose not just the chipset sale, but the price difference between a Core i7 and a Lynnfield as well.

So Who Wins?

Lord only knows. As mentioned above, no one outside of lawyers and executives at Intel and Nvidia knows any details of the filing or the underlying license agreement. That could take years to figure out, though. Nvidia, for its part, says they are going to move ahead with shipping Nehalem chipsets.

This makes sense: if they wait and win, they will have almost no window to get those chipsets out, and the development they put into it is out the window. Even if they put the chipsets out and loose later on, the court will figure out a, likely somewhat punitive, royalty for what’s already been sold. Nvidia will probably still be ahead of not having sold any chipsets.

Obviously, users are better off with more selection, so our biased interest is behind Nvidia on this one. But the Nehalem question and, along with Ion, Intel’s market segmentation goals, could just be skirmishes before a coming war. Not between Intel and Nvidia, but between the relative importance of CPUs and GPUs.