Intel, NVIDIA sign $1.5B cross-licensing agreement

NVIDIA and Intel have come to terms in their patent dispute, which has been ongoing for some time, and the agreement will bring NVIDIA $1.5 billion over the next six years. This is a huge deal for both companies, and could result in an Intel IGP with NVIDIA technology.

On a Monday afternoon conference call addressing the new agreement, NVIDIA CEO Jen-Hsuan said the following:

"The cross-licensing agreement allows Intel to integrate NVIDIA technologies and those that are covered by our patents into their CPUs, such as Sandy Bridge, for example. And a cross-license allows us to build processors and take advantage of Intel patents for the types of processor we're building—Project Denver, Tegra, and the types of processors we're going to build in the future."

Sandy Bridge is an excellent example of where this deal could help Intel. Although the graphics in Intel's new Sandy Bridge chipset are twice as fast as prior Capella-based chipsets, it's not as though Intel can't use more help in that area.

Despite the deal, these two companies have plenty to argue about, still. After all, Microsoft described how its next version of Windows will run on ARM CPUs. That includes NVIDIA's version, and Intel might need to be concerned about that, despite the fact that for full-fledged laptops and desktops, it has nothing to be concerned about from NVIDIA. Ah, yes, NVIDIA addressed the so-called and long-running NVIDIA x86 rumor, with Jen-Hsuan saying:

"We have no intentions of building x86 processors. Our intention is to capitalize on the growing popularity of ARM processors [...] We've always felt that building yet another x86 processor when the world is a-flood with them is a pointless exercise. NVIDIA wants to build the processor of the future."

You can read the full press release below.

Intel to Pay NVIDIA Technology Licensing Fees of $1.5 Billion
New Six-Year Cross-License Renews Previous Agreement
SANTA CLARA, CA -- (Marketwire) -- 01/10/2011 -- NVIDIA announced today that it has signed a new six-year cross-licensing agreement with Intel.

For the future use of NVIDIA's technology, Intel will pay NVIDIA an aggregate of $1.5 billion in licensing fees payable in five annual installments, beginning Jan. 18, 2011.

NVIDIA and Intel have also agreed to drop all outstanding legal disputes between them.

"This agreement signals a new era for NVIDIA," said Jen-Hsun Huang, NVIDIA's president and chief executive officer. "Our cross license with Intel reflects the substantial value of our visual and parallel computing technologies. It also underscores the importance of our inventions to the future of personal computing, as well as the expanding markets for mobile and cloud computing."

Under the new agreement, Intel will have continued access to NVIDIA's full range of patents. In return, NVIDIA will receive an aggregate of $1.5 billion in licensing fees, to be paid in annual installments, and retain use of Intel's patents, consistent with its existing six-year agreement with Intel. This excludes Intel's proprietary processors, flash memory and certain chipsets for the Intel platform.

The existing agreement is to expire March 31, 2011.

Pursuant to U.S. GAAP, a portion of the proceeds will be accounted for and attributed to the settlement of prior legal claims. This amount, which NVIDIA anticipates to be less than $100 million, will be included in the company's fourth-quarter results.

The balance of the licensing fees will be accounted for on a straight-line basis over the six-year term of the agreement. Accordingly it is anticipated that this would amount annually to approximately $233 million of operating income and an increase in net income of $0.29 per diluted share, on a full year basis.

Microsoft confirms next major version of Windows to support ARM

As expected, at CES Microsoft announced that the next major version of Windows (Windows 8?) will finally support System on a Chip (SoC) architectures, including ARM-based systems from NVIDIA, Qualcomm, and Texas Instruments. Microsoft Windows President Steven Sinofsky was present at the press conference, held a few hours before CEO Steve Ballmer's CES keynote.

It's obvious why Microsoft is finally supporting ARM. ARM processors are well-suited for tablets, and tablets are one of the form factors Microsoft plans to target with the next generation of Windows. Indeed, there will also be an ARM version of Office.

Interestingly, Sinofsky explicitly forbade anyone from video taping portions of the demonstration.

You can read the full press release below:

Microsoft Announces Support of System on a Chip Architectures From Intel, AMD, and ARM for Next Version of Windows

LAS VEGAS — Jan. 5, 2011 — Microsoft Corp. today announced at 2011 International CES that the next version of Windows will support System on a Chip (SoC) architectures, including ARM-based systems from partners NVIDIA Corp., Qualcomm Inc. and Texas Instruments Inc. On the x86 architecture, Intel Corporation and AMD continue their work on low-power SoC designs that fully support Windows, including support for native x86 applications. SoC architectures will fuel significant innovation across the hardware spectrum when coupled with the depth and breadth of the Windows platform.

At today’s announcement, Microsoft demonstrated the next version of Windows running on new SoC platforms from Intel running on x86 architecture and from NVIDIA, Qualcomm and Texas Instruments on ARM architecture. The technology demonstration included Windows client support across a range of scenarios, such as hardware-accelerated graphics and media playback, hardware-accelerated Web browsing with the latest Microsoft Internet Explorer, USB device support, printing and other features customers have come to expect from their computing experience. Microsoft Office running natively on ARM was also shown as a demonstration of the potential of Windows platform capabilities on ARM architecture.

Windows will continue its industry-leading support across the widest possible set of devices, delivering the breadth and choice that customers demand. Intel and AMD continue to evolve and improve the x86 platforms, including new low-power systems, and advance new designs such as the recently announced 2nd Generation Intel® Core™ processor family and AMD’s Fusion accelerated processing units (APUs). NVIDIA, Qualcomm and Texas Instruments are joining Microsoft to provide ARM-based designs for the first time.

“With today’s announcement, we’re showing the flexibility and resiliency of Windows through the power of software and a commitment to world-class engineering. We continue to evolve Windows to deliver the functionality customers demand across the widest variety of hardware platforms and form factors,” said Steven Sinofsky, president of the Windows and Windows Live Division at Microsoft.

SoC architectures consolidate the major components of a computing device onto a single package of silicon. This consolidation enables smaller, thinner devices while reducing the amount of power required for the device, increasing battery life and making possible always-on and always-connected functionality. With support of SoC in the next version of the Windows client, Microsoft is enabling industry partners to design and deliver the widest range of hardware ever.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Silicon Partner Quotes

AMD

“We are entering a new era of computing where HD content and 3-D user interfaces are commonplace, from high-end gaming and content creation to video playback and Web browsing. Together, AMD and Microsoft enable these vivid and engaging PC experiences on x86-based devices, ranging from high-resolution, multidisplay desktops to ultrathin notebooks, netbooks and tablets, and we look forward to a new wave of innovation made possible by Windows and AMD Fusion APUs. Windows and AMD Fusion APUs bring to life outstanding Internet experiences, smooth video playback of HD and 3-D content, and acceleration of popular productivity applications.”

Manju Hegde
Corporate Vice President, Fusion Experience Program
AMD (NYSE: AMD)

ARM Holdings plc

“We are excited by today’s announcement, which marks a significant milestone for ARM and the ARM Partnership, and we look forward to working with Microsoft on the next generation of Windows. Windows combined with the scalability of the low-power ARM architecture, the market expertise of ARM silicon partners and the extensive SoC talent within the broad ARM ecosystem will enable innovative platforms to realize the future of computing, ultimately creating new market opportunities and delivering compelling products to consumers.”

Warren East
CEO
ARM

Intel Corporation

“Even conservative predictions show billions of devices coming online in the next few years. One need only look at the creation and rapid growth of the netbook category to grasp what an Intel and Microsoft combination can deliver. While still in the future, what is so exciting is how our two companies will be able to match a tailored, low-powered Windows operating system with future generations of our popular Intel® Atom™ processors to deliver unique, PC-like experiences that offer the best battery life, performance and security around.”

Douglas L. Davis
Vice President, General Manager, Netbook and Tablet Group
Intel

NVIDIA Corp.

“Windows on ARM represents a seismic shift for the computing industry. ARM is already the largest and fastest-growing CPU architecture in the world, and today’s major news of Windows will only accelerate its adoption. We look forward to working with Microsoft to create amazing new computing devices with Windows.”

Jen-Hsun Huang
President and Chief Executive Officer
NVIDIA

Qualcomm Inc.

“Today signals a significant step forward for the future of computing. We at Qualcomm are excited about continuing our relationship with Microsoft to extend the reach of Windows to more Snapdragon-powered devices, offering high-performance mobile solutions with always-on connectivity.”

Rob Chandhok
President, Qualcomm Internet Services
President, Qualcomm Innovation Center Inc.

Texas Instruments (TI)

“Texas Instruments (TI) is pleased to collaborate with Microsoft to make Windows on mobile devices a reality. TI has long believed that low power is the fundamental of fundamentals when it comes to mobility, and we look forward to taking our popular OMAP™ platform, with the ideal balance of high performance and low power, into exciting new mobile computing devices.”

Remi El-Ouazzane
Vice President and General Manager, OMAP Platform Business Unit
TI

Intel intros Sandy Bridge; processor, memory controller, graphics, and DRM all integrated

Intel has finally unleased its second-generation Core CPUs on the world. The so-called Sandy Bridge family contains 29 new mobile and desktop CPUs in i3, i5 and i7 flavors. Additionally, Intel has included new integrated graphics technology that while not eliminating the need for discrete graphics cards, certainly makes it more of an option for many folks.

The Sandy Bridge CPUs are based on Intel's 32nm micro-architecture, and are the first to put both the processor, memory controller, and graphics on the same die. While not good enough to eliminate discrete graphics for all, Intel claims, and reviews seem to show, that the new HD 2000 and 3000 processor graphics provide twice the performance of prior Capella-based systems.

The new CPUs differ in naming from the prior Core i3, i5, and i7 versions: as opposed to the 3 number versioning, they now have four numbers (example, Core i7-720QM vs. Core i7-2920XM). Quad-core i7 CPUs will be the first to ship, most likely hitting this week, with dual-core versions shipping in February, and ultra-low voltage (ULV) versions to be introduced in the the second half of this year.

While that may cover most os what interests the general public, there's more news for those who hate DRM. In addition to moving the processor, memory controller, and graphics onto the same die, the new Sandy Bridge CPUs will also move DRM there as well.

This is definitely a move that studios will approve of, and Thomas Gewecke, president of Warner Bros. Digital Distribution, said,

"The new Intel technology is a fundamental change for us [...] it creates a fundamentally more secure platform in the PC environment."

It does open a door for Intel with Hollywood, but it also opens a door for AMD with those who are anti-DRM.

As the Inquirer said, As with Intel's earlier, aborted scheme to put a serial number in every CPU chip, it is possible that consumers will refuse to buy the chips because of the DRM lock-down.

It's unlikely that this will matter to most people, but there are some who might think twice about it. That said, more security for content is what Hollywood wants, and this might mean more content available online. It's a double-edged sword, and time will tell.