Nvidia Sets New Mobile Standards With Tegra K1
Nvidia (NASDAQ:NVDA) started off the 2014 Consumer Electronics Show (CES) by introducing its latest Tegra ARM SoC: the Tegra K1 (code-named Project Logan). The Tegra K1 mobile processor is a 192-core super chip that brings the Kepler architecture, which is the world’s fastest and most energy-efficient GPU architecture, to the mobile platform. Nvidia claims that using the Kepler GPU enables the new mobile processor to be 1.5 times more efficient than other mobile GPUs and offer better graphics than the Xbox 360 and PlayStation 3.
Tegra K1 will be available in two variants: a 32-bit option with an A15 ARM CPU and a 64-bit unit with a dual-core Denver CPU. Offering a 64-bit CPU means the chip can theoretically be used in high-end mobile devices that require more than four gigabytes of RAM, the upper limit that 32-bit chips can address. [1] While the first version will be available in the first half of 2014, the 64-bit version will start shipping in the latter part of the year.
Nvidia believes that Tegra K1 will help the company set new mobile standards by supporting the latest PC-class gaming technologies on the mobile platform. Tegra K1 offers real-time computing, global illumination, higher dynamic range and greater detail, including reflective surfaces, dripping water and other realistic physically-based rendering. Nvidia expects the performance and feature gap difference between mobile and PC high-end gaming to blur in the future.
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In an effort to reduce its exposure to declining PC sales, Nvidia has been focusing on expanding its footprint in alternative growth markets. Leveraging its Tegra processors to tap growth in mobile computing is a key long term growth strategy for the company.
In addition to Qualcomm (NASDAQ:QCOM) and Samsung, Nvidia competes with Broadcom (NASDAQ:BRCM), Marvell and MediaTek, and the relatively new entrant Intel (NASDAQ:INTC). Nvidia’s current generation Tegra 4 mobile processor feature 72 GPU cores and is being used in Microsoft’s (NASDAQ:MSFT) Surface 2 tablet, Asus’s Transformer Pad Infinity hybrid, the Toshiba Excite Pro tablet and Xiaomi’s Phone 3.
Offering significant performance improvement over Tegra 4, Nvidia’s next generation mobile processor (Tegra K1) should be a big step in accelerating its growth in the mobile computing market. Though we estimate Tegra revenue to shrink by 35% in fiscal 2014, we forecast revenue to grow by nearly 20% next year and cross $1 billion by the end of our five- to sever-year review period. In addition to mobile devices, NVIDIA plans to implement the Tegra K1 in automotive, gaming console, and 4k television systems as well.
Our price estimate of $16.42 for Nvidia is almost in line with the current market price.
See our complete analysis for Nvidia’s stock
Notes:- CES 2014: Nvidia Tegra K1 offers leap in graphics power, BBC, January 6, 2014 [↩]