By Lauren Pollock
Nvidia Corp. said it plans to wind down its Icera modem
operations as the graphics chip maker shifts its focus toward
gaming, automotive and cloud computing applications.
The company, which said it is open to a sale of the technology
or operations, purchased Icera in 2011 to compete in the smartphone
segment. But that business proved volatile. Rivals such as Qualcomm
Inc. snapped up most of the available market in smartphones, while
several Android-based tablets using Nvidia's chipset failed to sell
well.
Since then, the company said it has reshaped its strategy to
focus on opportunities in gaming, automotive and cloud computing
applications.
It added it expects the Icera 4G LTE modem to meet its needs for
the next year or more, but the company expects to join forces with
third-party modem suppliers and will no longer develop its own.
The operation has approximately 500 employees, based primarily
in the U.K. and France, with smaller operations in Asia and the
U.S.
Nvidia said it plans to offer further details, including the
estimated financial impact, when it reports quarterly results on
Thursday.
Most of Nvidia's business comes from graphics-processing chips
embedded in high-end PCs and workstations, used by specialists like
graphic designers, as well as gamers, who need the extra
horsepower. That high-end focus helps offset a structural decline
in PC sales.
The company reported in February that its earnings rose 31% in
the fourth quarter thanks to higher-than-expected revenue.
Shares edged fractionally higher after hours and are up 10% this
year through Tuesday's close.
Write to Lauren Pollock at lauren.pollock@wsj.com
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