Nvidia clearly isn’t worried about upsetting Intel now that the rift between the two companies is out on the public battlefield. However, we were still surprised at Nvidia’s comments at the Morgan Stanley Technology Conference in San Francisco yesterday, in which the company revealed that it had plans to enter the x86 processor market in the next two to three years.

In a Q&A session at the conference, Nvidia’s senior vice president of investor relations and communications, Michael Hara, was asked when Nvidia would want to get into the general purpose microprocessor business. Hara said that “the question is not so much I think if; I think the question is when.”

“I think some time down the road it makes sense to take the same level of integration that we’ve done with Tegra,” said Hara. “Tegra is by any definition a complete computer on a chip, and the requirements of that market are such that you have to be very low power, very small, but highly efficient. So in that particular state it made a lot of sense to take that approach, and someday it’s going to make sense to take the same approach in the x86 market as well.”

However, Hara also pointed out that Nvidia’s x86 CPU wouldn’t be appropriate for every segment of the market, and would be mainly targeted at smaller system-on-chip platforms. “If you look at the high-end of the PC market I think it’s going to stay fairly discrete, because that seems to be the best of all worlds,” said Hara, adding that “a highly integrated system-on-chip is going to make sense” in the MID (mobile intelligent device) and netbook markets.

Although Hara didn’t reveal a specific timeframe for the new CPU, he did point out that “it’s not necessary today,” because a combination of Intel’s Atom CPU with Nvidia’s Ion platform would suffice. However, he added that “two or three years down the road I think it’s going to make sense,” and said that “we won’t talk much more about what we think about that timeframe, but there’s no question it’s on our minds.”

Of course the big problem for Nvidia here is that it doesn’t have an x86 license from Intel to produce its own x86 CPUs. However, rumours appeared last year suggesting that Nvidia was considering an alliance with VIA to purchase its processor division, although these were later denied by VIA. Last week, Intel’s CEO Paul Otellini also took a swipe at Nvidia’s lack of x86 CPU technology, saying “If you don't have a microprocessor, what else do you have to sell?”

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