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ATI seals deal for graphics chipset

Japan's NEC announces it plans to use a chipset from ATI Technology in eight new notebooks sold in Europe and Japan.

Japan's NEC on Thursday announced it would use a chipset from ATI Technology in eight new notebooks sold in Europe and Japan.

The announcement is a significant win for ATI's Radeon IGP chipset, which incorporates the company's graphics processors. ATI is best-known as a graphics chip maker, but has since broadened its business to include chipset production.

While a processor can be seen as the brain of a PC, a chipset is its nervous and circulatory system, managing data that flows between a processor, memory and other system components.

Chipsets are a new market for ATI. This new territory is important for the struggling company, however, to maintain share in a rapidly changing market. As price wars push PC selling prices down, PC manufacturers have begun using chipsets that incorporate graphics processors to help cut costs and boost profit margins. Competition in the market is getting tougher, however; aside from rival Nvidia, chip giant Intel and VIA Technologies also produce chipsets.

NEC will use two different versions of the Radeon IGP chipset, the IGP 320M for Advanced Micro Devices processors and the 340M for Intel processors, said ATI spokesman Chris Hook. The company now claims 20 individual PC models that use its Radeon IGP chipset, Hook added.

The Radeon IGP chipset works with notebooks and desktops that use AMD Athlon or Intel Pentium 4 and Celeron processors. While many of the company's deals have been with notebooks that use AMD processors, ATI expects to announce several deals for desktops using Intel's Pentium 4 in the coming months, Hook said.

Nvidia entered into the market last year with its Nforce chipset for desktops based on the AMD Athlon chip. The company counts Hewlett-Packard, Micron PC and other large PC makers as customers. It also produces a similar chipset for Microsoft's Xbox.