Could a new, indigenously designed CPU help Nvidia compete against industry heavyweights such as Intel and AMD?
Well, according to In-Stat analyst Jim McGregor, Nvidia has little choice but to develop such a processor if it hopes to maintain and improve its current market position.
"They are between a rock and a hard place," McGregor told Bloomberg.
"Nvidia doesn't have that much time. Their business model is under pressure."
Indeed, the company is already working on a new microprocessor for tablet devices that is expected to "compete directly" with Intel products.
"Nvidia began working on a [new] tablet chip after an earlier effort to create laptop processors didn't pan out...Those chips weren't cheap enough to compete with Intel's Atom chips," explained Bloomberg's Ian King and Chinmei Sung.
"The effort would help Nvidia tap the burgeoning market for tablets, spurred by the success of Apple's iPad. It also may serve as a counterattack against Intel and AMD as they encroach more onto Nvidia's home turf of graphics chips."
The nascent CPU project is reportedly based on technology developed by Transmeta and uses software to replicate the way Intel (x86) chips work.
However, McGregor noted that previous efforts by Transmeta to design an x86 emulator had failed.
"It's hard to deliver enough performance to run computer programs like Microsoft Windows fast enough," he added.
Meanwhile, Nvidia CEO Jen-Hsun Huang told CNET that the company's CPU strategy was based solely on ARM architecture.
"Our CPU strategy is ARM...[It] is the fastest growing processor architecture in the world today. ARM supports [Google's] Android best. And Android is the fastest growing OS in the world today," he emphasized.
"[Our] dual-core Tegra 2 chips currently comes in two flavors, the AP20 for smartphones and the T20 for tablets. And both of them are being designed into products."