NVIDIA and Intel Settle, NVIDIA Still Prohibited from Building Chipsets for Newest Intel Processors

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Much has been made over the past year or so regarding NVIDIA's exit from the chipset business in the wake of a dispute with Intel over whether or not NVIDIA was permitted to build chipsets for Intel's latest Core series processors. That dispute forced Apple's hand for its recent small notebooks, leading Apple to stick with aging Core 2 Duo processors paired with a custom NVIDIA integrated graphics chip, as NVIDIA was still permitted to offer chipsets compatible with those processors. The alternative for Apple was to offer newer Intel processors but with Intel's integrated graphics, which offered much poorer performance than NVIDIA's offerings.

NVIDIA and Intel today announced that they have entered into a new patent cross-licensing agreement that will see Intel pay NVIDIA $1.5 billion over six years, but the new agreement (PDF) appears to still prohibit NVIDIA from developing its own chipsets for Intel's latest processors.

The Parties agree to amend the Chipset License by adding the following at the end of Section 2.14 of the Chipset License:

"Notwithstanding anything else in this Agreement, NVIDIA Licensed Chipsets shall not include any Intel Chipsets that are capable of electrically interfacing directly (with or without buffering or pin, pad or bump reassignment) with an Intel Processor that has an integrated (whether on-die or in-package) main memory controller, such as, without limitation, the Intel Processor families that are code named 'Nehalem', 'Westmere' and 'Sandy Bridge.'"

Rumors of a settlement had been circulating, but NVIDIA has remain firm in its stance that it has exited the chipset business for good and that Apple is likely to continue using Core 2 Duo processors paired with NVIDIA's MCP89 chipset for quite some time. For its part, Intel's latest Sandy Bridge processors, introduced last week, bring significantly enhanced graphics performance for integrated systems, making them a viable alternative for Apple in future hardware updates.

Update: From the press call:

NVIDIA just said on its press call that it has "no intentions to build chipsets for Intel processors," and that Intel will be able to use NVIDIA's technology in Sandy Bridge

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