nVidia CEO Sees Tegra as New Growth Engine

SANTA CLARA, Calif. – There’s nothing like a 60 percent collapse in sales to calm down even the most bilious of CEOs. Case in point, nVidia chief Jen-Hsun Huang, who was definitely calmer in a presentation today than he was a few years back when he promised to “open up a can of whoopass” on Intel.

That’s not to say he didn’t take his shots at Intel (NASDAQ: INTC), based just a mile up the road, during a financial analysts briefing here at nVidia’s (NASDAQ: NVDA) headquarters. He stood his ground when questioned about issues concerning Intel and AMD (NYSE: AMD), but there was less name calling than before.

Mostly, it was a discussion of how nVidia is a company in transformation. Its dominant business, graphics processors, will be the minority of its income in just a few years while Tegra, its embedded system on a chip (SoC), will account for more than half of income.

“We’ve invested in this because we believe wireless devices will proliferate all over the world,” Huang told the audience. “You need a computing architecture as good as in your PC but low power like your cell phone. The result is Tegra.”

Long-term, he believes the company will be half Tegra and the other half its desktop and mobile processor business, GeForce, Tesla and Quadra. “The reason I think it’s half Tegra is because I’m certain that’s where the industry is going. These laptops we’re carrying around? In 20 years, they won’t even look right. Kids will talk about these refrigerators their parents carried around.”

Leading that group is Michael Rayfield, a veteran of Texas Instruments who spoke after Huang. As vice president and general manager of the mobile business unit, Tegra is his to shepherd to market and to OEMs. So far, Tegra has 42 total design wins, announced at the recent Computex show, including 18 smart phones and 18 customers for mobile Internet devices (MIDs).

nVidia has an aggressive roadmap for Tegra; instead of the usual two or three years for a refresh, it plans to release new products annually. The second generation Tegra is due by next year and will feature four times the performance in the same power envelope, which is under one watt. The third generation, one year after that, will have 10 times the performance as generation one, in the same power envelope.

“There will be a shorter time span between generation two and generation one design because gen-two is compatible with gen one, that’s why many customers went with it,” he explained.

One analyst in attendance, JoAnne Feeney, managing director and senior research analyst with FTN Midwest Securities, said she thinks Huang is taking the smart view, but there are short-term questions. “He’s correct in focusing long-term on Tegra, but it’s going to take a while to get that business going for them. Short-term, they have challenges,” she told InternetNews.com.

Next page: Hundreds of cores

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Those challenges include getting its graphics business moving. ATI, AMD’s graphics unit, is well-ahead of nVidia in coming to market with a 40 nanometer part as well as having product ready for the DirectX 11 graphics library in Windows 7.

But by the second half of 2010, nVidia could have made the shift from a graphics processor to a powerful SoC design that becomes the bulk of its business, and Feeney thinks Rayfield is the one to do it. “He spent 16 years at Texas Instruments, and they are the leaders in integration on silicon,” she said. “I think Mike is on to something but it will take time.”

Hundreds of cores

Tegra didn’t get all of the attention, though. Huang talked at length about transitioning his GPU business from just game acceleration to co-processing with a CPU.

“There are so many new apps that now require us to add something to it, whereas the architecture of the microprocessor is no longer adequate. The answer is a parallel architecture that doesn’t just have two or four cores but hundreds, moving to thousands of cores, not fetching data through the cache but streaming through the processor,” he said.

“If you make the bet that you don’t want to replace the microprocessor, that the microprocessor is an extraordinary piece of hardware that should be there, but you want to add multiprocessing to it, then you will make a unique architecture good at one thing: parallel processing,” Huang added.

nVidia projects the Quadro and Tesla market, which use the graphics processors as computation accelerators, will be a $5 billion business in time and that nVidia “can make a far greater impact on the industry through GPU computing.”

What non-x86 processors lacked was scale. There were no Cell processors in the field, he said by way of example, so no one wrote apps for it, and therefore, no one used it. The GeForce graphics processor, on the other hand, is in millions of computers. By writing apps in nVidia’s CUDA language, developers could take advantage of their existing video card in a C-like language and gain tremendous horsepower.

“By putting CUDA on GeForce, we eliminated a chicken and egg problem. The volume was there. Only x86 has more developers. No other computing architecture I know has shipped 120 million units and it’s one coherent architecture,” he said, in reference to the multiple generations of GeForce.

nVidia currently has 5,000 enterprise customers using CUDA applications in things like energy exploration, drug research and medical imaging, and more than 200 universities around the world teaching CUDA to its students.

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