Continued...

Then again, there might not be a reason for ATI to worry at all in regards to shipments. By the time NVIDIA gets regulatory approval, ATI would have found a new supplier or fixed its problems. In fact, I would go even further and say that NVIDIA should stick to supplying southbridges to ATI. This would prove to be a luminous long-term strategy, as it would make NVIDIA one of the major developers (if not the only one) making others dependent on them.

This will not happen though, since ATI is smarter than to simply hand over the market to NVIDIA. They will see this coming and start their own development, but NVIDIA would have a head start, and short of a major architectural revamp, southbridges are here to stay.

NVIDIA also has presence in India and other countries globally, but not in Taiwan, which is the motherboard hub of the computing industry. That would change now with the acquisition of ULi. It will give NVIDIA the presence in key places in Asia and that in itself justifies the $50 million acquisition amount.

NVIDIA is consequently available on the AMD platform in regards to onboard video, and let’s face it, the budget Intel market is far more lucrative (volume wise) than the AMD market will be in quite some time. This would mean that NVIDIA needs to get into the Intel market as soon as possible, and if ULi can help out NVIDIA with its engineering resources, this is again enough to justify NVIDIA’s $50 million investment.

Finally, NVIDIA has been rather silent on the mobile platform. Perhaps ULi’s acquisition is somewhat of a hint about what’s to come from NVIDIA in that area as well. In a notebook, the southbridge designs are critical and ULi will bring with it the expertise of southbridge architecture, which could again play in favor of NVIDIA.

Conspiracy theories apart, once you put everything together, NVIDIA has done an out-of-the-blue but excellent deal, which will help it on numerous fronts excessively.