Nvidia CEO Jen-Hsun Huang expects the company's mobile processor business to explode over the next several years as the firm transitions away from making graphics processors for PCs to chips for smartphones and tablets. He also said the firm will hold off on acquisitions for now.
At an investor conference Huang said he expects the total addressable market for mobile chipsets to grow tenfold, to $20 billion by 2015, while the total addressable market for graphics processor business is expected to grow just 75 percent, to $7 billion, in the same period. Nvidia has been steadily growing its smartphone and tablet influence and market share via its Tegra 2 chipsets for phones such as the Samsung Galaxy S II and LG Optimus 2X. Huang estimated that Tegra is in roughly half of all high-end Android phones and 70 percent of Android tablets, and he expects to maintain high market shares in each category.
Despite the momentum, Huang cautioned that Nvidia is still relatively new to the mobile chip business compared with the likes of Qualcomm (NASDAQ:QCOM), Texas Instruments and Samsung. "Our genuine conservatism was misinterpreted as absence of growth," he told Dow Jones Newswires. "My sense is that we're going to grow, and we just wanted to take a more conservative posture in the marketplace, considering some actions that our companies, their various competitors and customers are taking against each other. They're not within my control or my ability to forecast."
Huang said next year Nvidia will sample chips that integrate Tegra with wireless baseband technology it acquired from its $367 million purchase of Icera in May. He told Dow Jones he expects the chip to be aimed more at the middle part of the market. However, Huang said he does not anticipate buying a company that provides Wi-Fi, as Qualcomm did when it bought Atheros for $3.1 billion. "If we decide to integrate it someday, it would be nice, but it's not that important right now," he said.
Huang said, aside from Nvidia and Qualcomm, "there's really not too many people actively on the dance floor." He also told reporters that all computing companies need to have a mobile strategy at this point. "If you don't have a mobile strategy, you're in deep turd," Huang said. "If you're not in mobile processors now, you're seven years too late."
- see this Dow Jones Newswires article (sub. req.)
- see this CNET article
- see this Forbes article
Report: Qualcomm still No. 1 in app processors, basebands
Nvidia buying Icera for 3G/4G baseband processor expertise
Icera demos LTE/HSPA modem running on existing hardware
Nvidia highlights Tegra 2, vows to lead 'superphone' category
Rumor Mill: Samsung, Nvidia hook up for major Tegra chip purchase
Correction, Sept. 7, 2011: This article originally incorrectly stated that Nvidia expects its mobile chipset revenue to increase to $20 billion by 2015 and its graphics processor revenue to increase to $7 billion. Jen-Hsun Huang was referring to Nvidia's total addressable market, not revenue.