Nvidia is to buy Taiwanese chipset company ULi in a stock purchase that values the acquisition at $52m.

ULi is part of ALi - aka Acer Labs - and was established as a fabless chip-maker in 2002 to handle ALi's chipset development and production. It's those products that Nvidia's after, to expand its nForce line-up into the low-end market, possibly because it expects Intel to play a much reduced role in this space over time.

Nvidia also said it hopes the ULi purchase will strengthen its presence in the Taiwanese and Chinese markets. The company said it intends to continue to supply ULi customers with current products for the foreseeable future.

Ironically, ULi has been supplying Nvidia's arch-rival ATI with South Bridge chips for its Intel-oriented chipsets for some time, and it will be interesting to see how that relationship progresses.

Under the terms of the agreement, Nvidia will pay TWD19 ($0.57) in cash for each outstanding ULi share and stock option. The acquisition, which is expected to be completed in Nvidia's Q1 FY2007 - which ends 1 May 2006 - provided regulators and shareholders approve. ®