Nvidia eyeing VIA acquisition, report claims

— 11:07 AM on March 18, 2008

With both AMD and Intel planning to integrate graphics cores into their processors in the not-too-distant future, Nvidia is in an understandably precarious situation. The graphics company told us last year it believed its "motherboard GPU" solutions would have quicker release cycles that those of processors with built-in graphics cores, but mobos with integrated graphics could nonetheless become difficult to sell if processors already integrate graphics functionality.

Fresh from its acquisition of Ageia, Nvidia apparently has its pocketbook out again, and this time the company is rumored to be on the lookout for an acquisition that might make its future battle with AMD and Intel a little easier. At least, that's what DigiTimes says it heard from its sources at motherboard makers, who claim Nvidia has been in talks with VIA Technologies about a possible buyout.

Nvidia reportedly discussed three different options with the Taiwanese firm: forming a strategic alliance, buying out VIA's processor division only, and snatching up VIA in its entirety. DigiTimes says the talks went nowhere because VIA's asking price was too high, but it believes VIA could revisit Nvidia's proposal again as its financial performance continues to deteriorate. VIA posted a year-over-year decrease in revenue of nearly 39% last month, from $77 million in February 2007 to $52 million in February 2008.

Today, VIA is one of the only players with an x86 license and Intel-compatible processors. The chips are hardly Core 2 Duo killers (or even Core Duo killers), but chips like the newly introduced Isaiah could be good enough for low-end desktop and mobile systems—especially if Nvidia combines them with graphics. Considering VIA is focusing on its processor and platform business, though, Nvidia may have to buy up the entire company if it wants the processor technology.

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