Best known for its graphics chips, NVidia is moving to make other parts of the computer motherboard, according to its president and CEO Jen-Hsun Huang. Digit caught up with him and discussed how he plans to take on the likes of Intel.

DIGIT: You mentioned recently that 2004 was a turning point for NVidia, as it saw momentum in new markets outside the PC market. How significant is this shift likely to be?

Huang: The PC market still represents about 65 per cent of our business, and it will continue to have a very large share of our business for a very long time. The reason for this is that the PC industry is large. If you look at the global consumption of semiconductors in the various sectors, PCs represent about 40 to 45 per cent, and so it stands to reason that it ought to be a very large percentage of our business.

Furthermore, the PC industry is the fastest adopter of technology, and because our business model is based on technology leadership and creating new inventions, introducing [a new technology] in the PC industry makes a lot more sense because it is adopted quickly.

DIGIT: Once you have decided that the PC will continue to be the centrepiece of your strategy, are you going to look at supplying more of the silicon that goes into the motherboard?

Huang: We build GPUs (graphics processing units) today, and we also build chipsets for networking and storage. We introduced a firewall processor for the PC, and our nForce 4 (chipset) has a security firewall built into it.

We invest in technologies that are really about the computing experience. If we build 3D technology into the PC, it makes the experience better.

DIGIT: How does all this fit into your original focus on graphics?

Huang: The first product that NVidia built had graphics, video, audio, and digital peripherals. It was our third product that only had graphics. We never saw ourselves as just a graphics company. We really saw ourselves as a company that built technology that transforms the computing experience.

Now we are larger, and we can expand and reach out into a bunch of other areas. We introduced recently, for example, a programmable video processor for the PC. The technology there is called PureVideo, and our vision is that we want the PC to be able to deliver the same level of video fidelity as consumer electronics equipment. So video processors, network processors, storage processors, security processors are all the things we are building, and are all related to the computing experience.

DIGIT: Intel's president and chief operating officer Paul Otellini has said Intel is adopting a platform strategy that would include both CPUs and other silicon on the motherboard. Would that be a threat to NVidia, considering Intel's market clout?

Huang: It is a threat to anybody who develops semiconductors. Our strategy is really very simple. We have to focus on areas where we can add value, and when I say we can add value, we have to be able to add more value than Paul. In the areas where the market doesn’t care for anything more than a vanilla PC, that is where (Intel's) market clout works.

Take for example, the corporate desktop. My secretary does not need audio, video and graphics. Her definition of experience is nothing that I can add value to. We focus on the people who want a great multimedia experience. I really don’t think Intel's platform strategy is going to resonate with them, because it is just not going to be good enough.

We all have to find our niches. If Intel thinks that the entire world is going to become one singular platform, it is like in the old days when Ford thought that it had the car for every user just as long as it was black. I see that Dell would like to be able to differentiate somehow. I see that Sony would like to differentiate somehow. They would like to build platforms specific for certain users.

What Intel would like to do is to commoditize the platform, at the expense of course of the OEMs (original equipment manufacturers). Of course Intel continues to provide us and the industry the opportunity to add value around the commodity platform, so there are still workstations, there are still media centres, there are still enthusiast PCs, there are still all kinds of different PCs.

DIGIT: Why did you decide to start the nForce program around processors from Advanced Micro Devices Inc (AMD) rather than from Intel?

Huang: We started the nForce program with AMD first because we didn’t have a cross license with Intel at that time. We were also just developing our technology, and if you are not good enough to succeed in the AMD market, what is the point of going to the Intel market.

We did a cross license with Intel recently. We have also been developing nForce now for almost four years, and it has become the premier brand of chipsets, and it is the most popular chipset amongst gamers. Now that we have the cross license and we think we have developed the skills, we are building chipsets for the Intel processor market, and we will focus on the areas where we can add value.