Nvidia’s New Tegra Chip Consumes Less Power & Improves Performance
Nvidia (NASDAQ:NVDA) has revealed its new Tegra quad-core processor called Kal-El that goes one step further and adds an additional fifth core in order to decrease power consumption. [1] Below we discuss what this new design brings to the table and how it could help the company in competing better against market leader Qualcomm (NASDAQ:QCOM). Apart from Qualcomm, Nvidia competes against other established players like Texas Instruments (NYSE:TXN) in mobile processor market. This market is also witnessing non-traditional players like Intel (NASDAQ:INTC) trying to make inroads.
Our price estimate for Nvidia stands at $19.90, implying a premium of roughly 35% to the market price.
How Mobile Devices Behave?
Most mobile devices are in standby mode for 80% of the time. [1] However even during this mode when user is not interacting with the device, there are many background processes in action such as email syncs, social media syncs etc. This implies that power management during this phase is critical for overall battery efficiency. Nvidia is attempting to to reduce the power consumption during standby mode with its new design.
New Processor Reduces Power Use
Nvidia has added a 5th low-processing power core called its companion core. This core is not designed to have high processing ability and thus consumes less power. This core is assigned to perform background tasks while a phone is in standby mode as well as other low-intensity tasks such as video and audio playback. A mobile user does not really care how fast the background processes run and so this eats up less power.
Android Could Run Better on Nvidia’s Kal-El
Nvidia states some advantages of its technique over asynchronous clocking, which is used by Qualcomm. One of the notable advantages is the improved efficiency of Google’s (NASDAQ:GOOG) Android operating system. The Android operating system assumes the same frequency of all cores and could work inefficiently in asynchronous clocking environment. Since Nvidia’s processor has both high frequency cores and low frequency companion core are never active at same time, Android can work efficiently. This is important given the surge in popularity of this OS among mobile users.
If Nvidia’s advantages turn out to be significant enough, it can potentially help it gain market share and compete better against likes of Qualcomm. Consequently, we could see a surge in mobile chip revenues. However it is too soon to take a side. The company might launch these new chips by end of this year. [2]
See our complete analysis for Nvidia’s stock.
Notes:
- Nvidia’s white paper on variable SMP [↩] [↩]
- Nvidia Quad-Core Chip Includes A Fifth, Low-Power Core, The Wall Street journal, Sept 20 2011 [↩]