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SAN MATEO, Calif. — Graphics chip vendor Nvidia Corp. plans to enter the chip set market next year with an integrated core logic device. The company plans to use its relationship with Microsoft Corp. to gain a toehold in the chip set segment with a device that integrates South Bridge functions with networking and audio capabilities.

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Jon Peddie, president of the market research firm Jon Peddie Associates (Mill Valley, Calif.), said Nvidia's move into core logic "is not a huge leap" for the company. The traffic routing features of a graphics controller are similar to the data routing tasks of a chip set, he said, and the six-million-transistor graphics chips Nvidia has designed demonstrates an ability to produce complex products, he said.

With proven technical expertise, Peddie said he expects Nvidia to succeed in the chip set market. Its primary competitors will be Intel, and Taiwanese chip set vendors Acer, Via Technologies and Silicon Integrated Systems (SIS). Although Intel has a large market presence, Peddie attributed it to chip set sales linked to Intel's processor sales, as the technology of the integrated devices is poor, he said. The Via and SIS devices are comparable, he said, while Acer seems to be a step behind. The technology of all three Taiwan-based vendors will lag behind Nvidia's designs, he said. "There is clearly a vacuum of technology, and Nvidia will be at the top of the heap," Peddie said.