Nvidia's ULI acquisition may mean it has Chipset Problems

[apoppin]

i couldn't help myself

from theInq:

ONE OF THE STRANGEST things to happen this year was last week's announcement that Nvidia had decided to buy ULI, a designer of PC chipsets. It's a $52 million riddle that, at the moment, may only have answers deep inside Nvidia. But perhaps there are some answers inside ATI too.

There are plenty of conspiracy theories running around. The main one is that nVidia did this just to annoy its chief competitor. ATI has been having problems with its south bridge technology for a while and ULI's chips have been used . . .

. . . that theory is pretty easy to discount. There are much better ways to annoy the competition for $52 million. And ULI is not supplying south bridges to ATI, it's supplying them to motherboard manufacturers which would make it a very indirect way of annoying the competition. Going a step further, it will be several months before every detail of the ULI acquisition is finalised giving ATI plenty of time to get its own south bridge back on track. . . .

That leaves a conclusion on the technology front: ULI doesn't have anything that Nvidia needs. There must be a good reason for spending $52 million otherwise the board wouldn't sign it off. The mystery deepens a lot further. . . .

Could it be that Nvidia has paid out $52 million to secure itself a new chipset design team? That seems a little expensive but, when you throw in the extras like the offices around Asia, it starts to make some sense. That might be worth it.

But there's only one thing that would make spending $52 million on a new design team genuinely worthwhile: if the old one was missing key people. And the most likely reason that key people would be missing is if they went somewhere else.

This is where ATI comes back into the story and we head firmly into conspiracy theory territory. It's noticeable that, where ATI once had chipsets that were mediocre at best, it now has chipsets that even Intel is willing to use. That's quite a big change. Could it be that ATI has managed to get itself a few key ex-Nvidia chipset engineers? Could it be that ATI has managed to get someone ex-Intel onboard who has managed to stay friendly enough with Chipzilla to sell a few chipsets back?

The answers may never be made public. But it could just be that Nvidia spent $52 million because ATI had given it no alternative if it wanted to stay in the chipset business.

:Q

Happy Hoildays!
[and keep those Rumours (and News) coming]

:thumbsup:

 

[Acanthus]

There is no doubt Nvidia is after ULi for their talent. They also wanted a presence in the taiwan market.

 

[jiffylube1024]

Interesting speculation. One thing is for sure: both ATI and Nvidia would be stupid to not try to acquire some of the best chipset designers in the world, so both sides of this theory make rational sense.

 

[apoppin]

Originally posted by: Acanthus
There is no doubt Nvidia is after ULi for their talent. They also wanted a presence in the taiwan market.

of course . . . but the question is did nVidia lose talent to ATi? Ati's chipsets "suddenly" got 'good'.

 

[ponyo]

I think the ULI acquisition is cheap and smart move on Nvidia's part. Again reaffirms my belief Nvidia is the Gorilla.

 

[nRollo]

LOL- yeah, and they swallowed 3dfx whole to get at their staff, because they feared upcoming ATI parts!

:laugh:

ATI has'em on the ropes again, so they have to look outside their firm for capable staff after getting beat up on all year.....errrr...wait.....


:laugh:


Merry Christmas poppin' Apoppin! I hope Santa brings you a 6800Ultra.

 

[otispunkmeyer]

ULi are a talented bunch..id want them on my team

 

[Lonyo]

Originally posted by: Rollo
LOL- yeah, and they swallowed 3dfx whole to get at their staff, because they feared upcoming ATI parts!

:laugh:

ATI has'em on the ropes again, so they have to look outside their firm for capable staff after getting beat up on all year.....errrr...wait.....


:laugh:


Merry Christmas poppin' Apoppin! I hope Santa brings you a 6800Ultra.

3DFX were dead, and getting IP and engineers from a dead company makes sense.

Nut why would nVidia need or want to buy Uli UNLESS they did have some need for better engineers, or patents or something?
nVidia aren't struggling, Uli aren't dead.

When Maxtor were bought by Seagate, Seagate said "they have better engineers, but we are going to use their excess HDD making capability".

What's your theory on why nVidia bought Uli?

 

[5150Joker]

I think nVidia bought ULi to pick up more engineering talent for further diversification rather than a reaction to a loss of talent. ATi's chipsets have gotten noticeably better but their southbridge still sucks.

 

[Fox5]

Originally posted by: Acanthus
There is no doubt Nvidia is after ULi for their talent. They also wanted a presence in the taiwan market.

I think nvidia may have backed themselves into a corner with their single chip nforce design. It just didn't leave as much room for improvement as dual chip designs were seeing, and why ATI and Uli designs were surpassing nvidia. It was probably easier to buuy Uli then go back to the drawing board and design a new chipset.

 

[nRollo]

Originally posted by: Lonyo
What's your theory on why nVidia bought Uli?

I don't think my theories have any relevance, because I don't know any more than anybody else does about this, so they'd be more like "guesses".

My "guess" is IP acquisition and entry to the mega volume low end "ECS" market, and control of ATIs only viable Southbridge was a welcome side effect.

 

[xtknight]

Originally posted by: Fox5
It just didn't leave as much room for improvement as dual chip designs were seeing, and why ATI and Uli designs were surpassing nvidia. It was probably easier to buuy Uli then go back to the drawing board and design a new chipset.

How so? I thought NVIDIA nForce 4 SLI was the most featureful chipset period? Supports multi-GPU and 1 GHz HT. What is it lacking? I haven't really been keeping up with chipsets.

 

[DeathReborn]

ULi can provide Triple Card Support, competent AGP & PCI-e and an upgrade path to (A)M2. Perhaps nVidia see bigger profits by buying ULi.

 

[Gstanfor]

Originally posted by: Rollo
LOL- yeah, and they swallowed 3dfx whole to get at their staff, because they feared upcoming ATI parts!

:laugh:

ATI has'em on the ropes again, so they have to look outside their firm for capable staff after getting beat up on all year.....errrr...wait.....


:laugh:


Merry Christmas poppin' Apoppin! I hope Santa brings you a 6800Ultra.

LOL! Rollo beat me to it!

BTW, what happened to that reply from sireric that pete was so adamant we would get??? Perhaps the Grinch stole sireric away to the south pole for xmas... or perhaps his words meant exactly what I said they meant...

Merry Xmas fanATics!

 

[apoppin]

Originally posted by: Rollo
LOL- yeah, and they swallowed 3dfx whole to get at their staff, because they feared upcoming ATI parts!

:laugh:

ATI has'em on the ropes again, so they have to look outside their firm for capable staff after getting beat up on all year.....errrr...wait.....


:laugh:


Merry Christmas poppin' Apoppin! I hope Santa brings you a 6800Ultra.

thanks, Rollo but i'd prefer an x1800xt or 7800gtx in AGP . . . Merry Xmas and Happy New Year also . . . maybe you'll get your "ultras" upgrade too.

Clearly nVidia figured the ULI acquisition would benefit them.

 

[Keysplayr]

Originally posted by: xtknight

Originally posted by: Fox5
It just didn't leave as much room for improvement as dual chip designs were seeing, and why ATI and Uli designs were surpassing nvidia. It was probably easier to buuy Uli then go back to the drawing board and design a new chipset.

How so? I thought NVIDIA nForce 4 SLI was the most featureful chipset period? Supports multi-GPU and 1 GHz HT. What is it lacking? I haven't really been keeping up with chipsets.

AMD is not the only platform Nvidia wants to manufacture for. There's that other upstart of a company, what's their name? Oh, right. Intel.

 

[Wreckage]

I bet they blew $50 million just to piss off ATI.

Now every Crossfire board with a ULI chipset is profit for NVIDIA, just like every sale of a Xbox 360

 

[Corporate Thug]

Originally posted by: Wreckage
I bet they blew $50 million just to piss of ATI.

Now every Crossfire board with a ULI chipset is profit for NVIDIA, just like every sale of a Xbox 360

LOL, just to piss off ATi? lemme guess: you are an econ major?

 

[Gstanfor]

Originally posted by: Corporate Thug

Originally posted by: Wreckage
I bet they blew $50 million just to piss of ATI.

Now every Crossfire board with a ULI chipset is profit for NVIDIA, just like every sale of a Xbox 360

LOL, just to piss off ATi? lemme guess: you are an econ major?

It is possible that ATi may have been planning to purchase ULi themselves (I have no idea if this is actually true or not). It is a move that may have made a lot of sense for ATi as they attempt to gear up for a share of the motherboard market. If that's the case then nVidia purchasing ULi from under their noses probably would have pissed them off just a little. The scenario I just presented is the only way the Inq's ravings make any sense, to me, anyhow.

 

[Pete]

Originally posted by: Gstanfor
BTW, what happened to that reply from sireric that pete was so adamant we would get???

Adamant? I said I'd ask, and maybe we'll see an answer after the holidays. I'm not expecting quick replies to some guy on an unofficial msg board a day before the holidays.

Sorry for the OT. Just to offer something on topic, I'm not sure how attractive a piece of the low-end MB pie is for a company touting 45% margins.

 

[apoppin]

Originally posted by: Gstanfor

Originally posted by: Corporate Thug

Originally posted by: Wreckage
I bet they blew $50 million just to piss of ATI.

Now every Crossfire board with a ULI chipset is profit for NVIDIA, just like every sale of a Xbox 360

LOL, just to piss off ATi? lemme guess: you are an econ major?

It is possible that ATi may have been planning to purchase ULi themselves (I have no idea if this is actually true or not). It is a move that may have made a lot of sense for ATi as they attempt to gear up for a share of the motherboard market. If that's the case then nVidia purchasing ULi from under their noses probably would have pissed them off just a little. The scenario I just presented is the only way the Inq's ravings make any sense, to me, anyhow.

From theInq:

. . . that theory is pretty easy to discount. There are much better ways to annoy the competition for $52 million. And ULI is not supplying south bridges to ATI, it's supplying them to motherboard manufacturers which would make it a very indirect way of annoying the competition. Going a step further, it will be several months before every detail of the ULI acquisition is finalised giving ATI plenty of time to get its own south bridge back on track. . .

ATi already has a big share of the MB market . . .

the conspiracy theory is that ATI - formerly maker of so-so MBs - SUDDENLY got "good" PLUS a big share of the low-end market . . . did they "steal" engineers away from nVidia or Intel?

that is the theory.

edited

 

[Gstanfor]

Originally posted by: Pete

Originally posted by: Gstanfor
BTW, what happened to that reply from sireric that pete was so adamant we would get???

Adamant? I said I'd ask, and maybe we'll see an answer after the holidays. I'm not expecting quick replies to some guy on an unofficial msg board a day before the holidays.

Sorry for the OT. Just to offer something on topic, I'm not sure how attractive a piece of the low-end MB pie is for a company touting 45% margins.

I'm sure a slice of the low-end pie would be extremely attractive to nVidia. Nearly all of the current growth in PC sales is occuring in the low-end, the high-end is virtually stillborn by comparison. By the same token why would nVidia bother with 6200 & 6100 GPU's if the low-end was so unprofitable. There is nothing to say that nVidia couldn't eventually pull off a 45% margin on an entry level chipset. More power to them if they do.

 

[Gstanfor]

Originally posted by: apoppin

From theInq:

quote:

--------------------------------------------------------------------------------
. . . that theory is pretty easy to discount. There are much better ways to annoy the competition for $52 million. And ULI is not supplying south bridges to ATI, it's supplying them to motherboard manufacturers which would make it a very indirect way of annoying the competition. Going a step further, it will be several months before every detail of the ULI acquisition is finalised giving ATI plenty of time to get its own south bridge back on track. . .
--------------------------------------------------------------------------------

ATi already has a big share of the MB market . . .

the conspiracy theory is that ATI - formerly maker of so-so MBs - SUDDENLY got "good" PLUS a big share of the low-end market . . . did they "steal" engineers away from nVidia or Intel?

that is the theory.

Appopin, I did read the entire article - the day It was published. Unlike you, I put very little stock in anything the Inq may have to say (they could state the sky is blue and grass is green, but I wouldn't believe them without credible, independent verification).

ATi may have decent market penetration so far as notebook motherboards are concerned, but their mainstream motherboard marketshare is not nearly so large. Certainly none of the (nationwide) distributors I source components from bother to stock any ATi motherboards at any pricepoint.

If ATi "stole" engineers from anywhere it would be Intel, not nVidia imho, given that Intel is known to have provided ATi with engineering assistance throughout the R300 era and there is a partnership/alliance between the two regarding integrated graphics for motherboards that use Intel CPU's.

 

[Killrose]

ULi came from ALi, so may be all the good patents and licence agreements are still with the old ALi group? 50M seems too small an amount for all of what ALi once had I think, so I am doubtful ULi is actually the old ALi group in its entirety.

How's that for speculation

 

[Humble Magii]

I think ATI is and was the one in trouble their chipsets haven't really gotten good at all or available in mass quantities. ATI used to have decent marketshare but it seems to be slipping mostly to Nvidia. ATI boards needed the ULi SB to make there boards viable and feature rich next to nforce 4 so I think ATI is the one that should have bought them out they needed or looks to be need the engineers to come up with some better ideas.

Nvidia probably made a smart move and for all we know it was for IP mostly as alot of companies do this. Nvidia may even use this in part to produce lower end budget boards that are feature rich to rival Intel.

I would be focusing more on what Intel does since they control most of the market anyways not on what little ATI or if your an ATI lover what Nvidia does.

Nvidia is by no means a gorilla especially compared to Intel marketshare wise. Graphics and mobos Intel beats both combined and then double that .