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.

Conference Call
NVIDIA will conduct a conference call with analysts, investors and media to discuss the license agreement at 2pm Pacific Time (5pm Eastern Time). To listen to the call, please dial (706) 679 2572; conference ID #: 36343898. A live Web cast (listen-only mode) of the conference call will be accessible at the NVIDIA investor relations Web site www.nvidia.com/ir and at www.streetevents.com. The Web cast will be recorded and available for seven days.

About NVIDIA
NVIDIA (NASDAQ: NVDA) awakened the world to the power of computer graphics when it invented the GPU in 1999. Since then, it has consistently set new standards in visual computing with breathtaking, interactive graphics available on devices ranging from tablets and portable media players to notebooks and workstations. NVIDIA’s expertise in programmable GPUs has led to breakthroughs in parallel processing which make supercomputing inexpensive and widely accessible. The Company holds more than 1,600 patents worldwide, including ones covering designs and insights that are essential to modern computing. For more information, see www.nvidia.com.

Certain statements in this press release including, but not limited to statements as to: the new era for NVIDIA; the value of our visual and parallel computing technologies; the importance of our inventions to the future of personal computing; expanding markets for mobile and cloud computing; licensing payments to NVIDIA; the accounting for and financial impact of the licensing payments to NVIDIA; and the effects of the company’s patents on modern computing are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: any termination of the license agreement between Intel and NVIDIA; global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of faster or more efficient technology; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the reports NVIDIA files with the Securities and Exchange Commission, or SEC, including its Form 10-Q for the fiscal period ended October 31, 2010. Copies of reports filed with the SEC are posted on the company’s website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

© 2011 NVIDIA Corporation. All rights reserved. NVIDIA and the NVIDIA logo are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.

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 also was shown as a demonstration of the full depth and breadth 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

Jen-Hsun Huang, the CEO of Nvidia said that Intel chip pricing was unfair but said that they are not planning to file an antitrust action lawsuit against Intel for now.  Intel sells Atom chips for $45 for a single unit, but sells three-chip sets for $25.  The extremely discounted price for bulk units lures customers away from AMD.  “That seems pretty unfair,” stated Huang. “We ought to be able to compete and serve that market.”

“We compete fairly. We do not force bundles on any computer makers and customers can purchase Atom individually or as part of the bundle,” responded Intel spokesman Bill Calder. “If you want to purchase the chip set, obviously there is better pricing.”

[via Reuters]