NVIDIA Will Buy ULi

NVIDIA Will Buy ULi Electronics

In a move that caught many in the industry by surprise, NVIDIA announced today that they have reached agreement to acquire ULi Electronics. ULi has been very active in the development of core logic chipsets, and in particular chipsets for the AMD processor market. ULi also markets the M1575 South Bridge which is used with the ATI RD480 Crossfire chipset, a solution used by Asus, MSI, Abit, and others who manufacture ATI chipset motherboards.

In conversations with ATI this morning, they emphasized that 90% of their chipset business consists of products using both ATI Northbridge and Southbridge products, mainly in the OEM and Notebook/Mobile market. This business will not be impacted. For those manufacturers using the ULi South Bridge, Patti Mikula, ATI Public Relations states: "ULi has committed to ATI and the manufacturers that the supply of ULi chips will not be interrupted."

ATI was aware that NVIDIA and ULi were discussing a sale and it sounded as if they were not a bidder for ULi. According to Mikula, "ATI has the highest confidence in our own chipset design team. Any current issues will be resolved with the release of the SB600 south bridge which is on schedule". ATI expects to introduce the SB600 South Bridge in about six months.

Other sources in the industry indicate that ATI has added resources to the SB600 development teams since it was known that ULi ownership could change hands, and that ATI has been pushing internally for an earlier release of SB600. Industry sources also indicate they were not aware of any technology exchange agreements between ULi and ATi that could become embarrassing with nVidia as the new ULi owner.

nVidia emphasizes that the acquisition of ULi adds significant Engineering Resources to the chipset/MCP development team. Bryan del Rizzo, NVIDIA Public Relations, commented: "ULi has significant presence in Taiwan, China, and the Asian market. That was attractive to NVIDIA. ULi also has a Taiwan Design Center. As a US Company, the addition of a Taiwan Design Center will be an asset to nVidia."

When asked if NVIDIA would continue to honor ULi supply commitments for current chipsets, del Rizzo indicated nVidia has no plans to change current ULi supply commitments in the short term. When asked about the longer term, del Rizzo replied "I can't comment on long-term nVidia plans."

NVIDIA Press Releases state that the acquisition is subject to regulatory approvals and the acquisition is supposed to be completed in the first quarter of NVIDIA's Fiscal 2006. According to del Rizzo, that means NVIDIA expects to have the acquisition completed by late January 2006.