Industry Expert Blogs

A couple days ago Nvidia dropped a shocking and surprising announcement that they were entering the IP licensing business! Huh…very interesting at first glance since this is a semiconductor company that now wants to license IP (to possible competitors that will/can compete with their own products). This could make sense for some markets, but the business/support models are completely different (if you look at revenue, bottom line, and other financials). Silicon Image (since they are just down the road so they popped up in my mind first) is one example of a company that sells semiconductor components and IP. It has worked for them in the past, but then again, they are the only game in town when it comes to HDMI/MHL so their business model is different from the GPU IP market since they “own” their market/technology. Silicon Image is the standards body with their own certification labs that grant you access to use their logo. In the GPU IP market there are three main players – IMG, Vivante, and ARM that share the pie of the licensable TAM, so this is different. In addition, for the rest of the market, other SoC vendors have their own internal development (ex. Qualcomm Adreno, Nvidia Tegra, etc.) that muddy the water.

So it makes you wonder – Are they in trouble? Why would they compete with and cannibalize their own products? Is this just a shift in business (model) strategy – which must be reviewed and constantly evolve? Are they just trying to access “other” markets? Etc…

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