Nvidia Weighs in on Intel Chip Pricing: "Unfair"

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Just when it looked like there might be a bit of a détente between graphics developer Nvidia and chip-making giant Intel, Nvidia CEO Jen-Hsun Huang decides to ratchet up the tensions again by characterizing Intel’s pricing of Atom CPUs as unfair, although he added his company has no plans to bring legal action against Intel…for now.

Intel’s Atom CPU’s are currently powering the majority of so-called “netbook” computers flooding the market: low-cost and comparatively low-powered notebook systems with small screens primarily intended to let users accomplish lightweight tasks like keeping up with email and surfing the Web. Intel sells two versions of the Atom CPU: a standalone version, and a version in a three-chip set that includes Intel’s Graphic Media Accelerator (GMA) graphics to drive a screen. Nvidia has developed its own Ion graphics platform to substitute for Intel GMA and radically boost the graphics performance of Atom-based systems—Nvidia claims up to tenfold performance improvements, which could make netbooks and appealing platform for games and video media. However, computer makers—ever cost-conscious in the low-margin netbook business—haven’t been rushing to embrace Nvidia’s Ion platform—because Intel sells Atom processors with GMA for $25, but Atom processors with no graphics at all cost $45, according to Reuters. So equipment manufacturers are forced to pay more for their CPUs, then more on top of that to Nvidia for enhanced graphics.

“That seems pretty unfair,” Huang told Reuters. “We ought to be able to compete and serve that market.”

Huang’s comments come just days after the European Union issued a €1.06 billion fine against Intel for anticompetitive practices, the largest antitrust fine ever levied by the EU against a company.

Intel plans to appeal the European Union antitrust ruling, and has consistently maintained it has done nothing wrong and that its actions have lowered technology prices for consumers. Intel also refuted Nvidia’s claims of unfair competition, with a spokesman noting that no one is forcing computer makers to buy chip bundles rather than stand-alone CPUs.

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