Nvidia Tries to Head Off Problem for PC Makers

The two chip makers, both based in Santa Clara, Calif., have been squabbling over terms of a licensing agreement. Under the 2003 pact, Intel granted Nvidia -- which is mainly known for graphics chips -- rights to make other products called chip sets that link Intel microprocessors to other parts of a PC.

At issue now is whether the 2003 agreement allows Nvidia to make chip sets that work with Intel's next-generation microprocessor, a product family dubbed Nehalem that is expected sometime this year. Nvidia contends that it does have those rights, but Intel disagrees. The question is important to some computer makers because only Nvidia chip sets now support a technology called SLI that allows PCs to run two or more Nvidia cards for managing graphics in a system.