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Nvidia warned off releasing integrated Intel chipsets early

Wait a couple of quarters, analyst suggests

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Nvidia is near to launching low-end integrated chipsets for systems based on Intel processors, a US analyst has alleged. However, the company was warned that a near-term release would be "premature" - if Nvidia wants to avoid degrading its gross margins.

The claim comes from Pacific Growth Equities analyst Satya Chillara in a report sent out to the company's investor clients and subsequently relayed by EETimes. ''Based on our checks, we believe that Nvidia now has chipsets to attack the low end integrated Intel-based chipsets,'' Chillara wrote.

''There are [two] reasons why we believe it might be premature for Nvidia to attack the low-end Intel-based chipsets. First, we believe Nvidia's cost structure for these low end IC's is not as efficient as their AMD-based chipsets. Moreover, we estimate that Nvidia's high cost structure could persist for the next two quarters. Second, in our opinion, the gross margins in this space will be challenging and pose a risk to performance.''

In short, Nvidia should wait until mid-2007 to release the products, rather than do so in the very near future.

According to Chillara, AMD's ATI-branded integrated chipsets yield 15 per cent margins.

Right now, Nvidia offers nForce 500 and 600 series chipsets for Intel processors. All of its offerings are pitched at what it calls the "performance" and "enthusiast" market segments. The Intel-oriented members of the nForce 4 series aren't much different.

All its integrated offerings - the GeForce 6100 series - are deisgned for AMD systems, a market in which it's now competing directly with AMD thanks to the processor maker's acquistion of Nvidia arch-rival ATI. ®

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