Nvidia acquires ULI - increases pressure on ATI

Santa Clara (CA) - Nvidia today announced that it will acquire chipset company ULI, which will allow the company to compete more effectively against ATI in the chipset arena. It may also force ATI to rethink its own product line, as the company currently relies on ULI products to support its own chipsets.

Originally founded as Acer Labs (ALI), ULI will become a part of Nvidia and support the graphic manufacturer’s expansion into the chipset business. For roughly $52 million, Nvidia buys itself an established foundation to strengthen its desktop chipset series and the recently launched mobile chipset product line.

While ULI adds few little new expertise and few products to Nvidia’s product line, Nvidia will be able to further drive its dual-graphics card technology SLI deeper into the mainstream. ULI is known for its far-reaching relationship to mainstream and low-end motherboard manufacturers. These relationships could very well turn out to be key to drive SLI further into the direction of a Centrino-like brand and anchor the option of dual graphics as standard feature in any class of PC - from enthusiast down to entry-level.

ATI may be directly impacted by the acquisition and locked out of some markets, as several motherboard manufacturers currently use ULI’s Southbridge across several chipset products, including the dual-graphics card technology Crossfire. ATI’s own Southbridge currently is somewhat outdated and a new version is not expected to arrive for several months.