Is Apple bailing on NVIDIA?

July 02, 2009 4:11 AM EDT

Former Inquirer writer Charlie Demerjian is reporting that Apple may stop using NVIDIA chips in upcoming Macs. He reports for SemiAccurate (a name that inspires confidence!), that Apple-NVIDIA negotiations on upcoming motherboard chips have come to a bitter halt.

Apple and NVIDIA are going through rocky times. The NVIDIA chip deformations, or bumps, the story of which Demerjian also initially broke and had been following closely don't seem to be abating.

The packaging defects have hit MacBook Pro owners with 8600M GT GPUs pretty hard. Apple, for their part, have issued an unprecedented three year free replacement if the NVIDIA chip goes bad. That is a significant cost because motherboard swaps are about the most expensive repair one can do on a laptop.

Apple this month also introduced the first 15-inch Unibody MacBook Pro without a NVIDIA 8600M GT. The machine still has an NVIDIA 8400M integrated chipset however, which hasn't been affected by "Bumpgate".  This was likely a cost cutting measure however, rather than an issue with bumps.

Demerjian also contends that the packaging problems affect some desktop GPUs as well.  This would bring Apple's Mac Pro line in. iMacs and Minis use mobile chipsets so they'd be included with MacBook Pros.

It also wouldn't just be Apple that is losing patience with NVIDIA. Dell is also rumored to be leaving the video card maker.

NVIDIA also has another big problem. Intel is trying to cut it out of making graphics processors for Dual Core Nahalem-based motherboards. If Intel wins, that would be a pretty strong blow to NVIDIA as those chips would be the logical next generation Macintosh CPU line.

If Demerjian is right, Apple would have to go to AMD/ATI, use Intel's own integrated GPUs or perhaps develop their own solution. They have been hiring graphics people from AMD like crazy lately, so something like that isn't totally out of the question.