Two major announcements by graphics giant Nvidia signal a shift of focus.

First, Nvidia announced yesterday that it will be ceasing all development of new chipsets. It is mainly because of a licensing agreement with Intel. In previous Intel computers, the processor (CPU) was connected to a northbridge chip. The north bridge would communicated with the memory (RAM) and an integrated graphics processor. It was also connected to a southbridge via the front side bus (FSB) that communicated with all other parts like the graphics card, sound card, etc.

In new Core i5 and i7 based computers, the CPU took over the duty of the northbridge and the CPU communicates with the southbridge using a proprietary bus called the Digital Media Interface (DMI) bus. Previously, Nvidia had a license to make northbridge and southbridge chips that used the FSB. Now, Intel isn’t giving them a license for the new DMI. So, Nvidia can’t make chipsets for Core i5 and i7 computers. There is ongoing litigation regarding the DMI licensing problem, but it will most likely not end in Nvidia’s favor.

Also, AMD, Intel and Nvidia are all working on their own CPU+GPU solutions where the CPU and GPU and integrated together on one chip. This could eliminate the need for separate graphics processors in low end computers all together. This basically means that Nvidia will no longer be providing integrated graphics and focusing only on discreet graphics cards.

Second, Nvidia announced today that the second generation of their Ion chipset will be arriving later this year. The Ion is a chipset for computers with Intel Atom processors like netbooks. This along with their Tegra system, show an increasing focus on compact and mobile computers.

These two aspects show a larger shift of Nvidia’s focus away from their traditional market. With sales of extremely powerful computers dropping and more and more people buying notebooks. The future of Nvidia could lie in cheaper, compact computers.