According to industry sources, the Santa Clara company is planning to offer a scaled-down version of its popular GE Force graphics card, using an internally developed south-bridge I/O controller and a north-bridge controller with integrated graphics functions to connect to PC133 SDRAM. Support for double-data-rate SDRAM will follow.

Nvidia is expected to offer the integrated chip set to support microprocessors from Intel and Advanced Micro Devices Inc. Taiwan motherboard giant Asustek Computer Inc. has already placed the Nvidia device on its road map for boards shipping in the first quarter of 2001, sources said.

When asked to confirm the planned rollout, a spokesman for Nvidia declined to comment.

Industry sources said the devices will rely on an embedded version of the company's GE Force engine, a technology that Nvidia believes will far outperform Intel's aging 752 graphics core, which is incorporated in the company's Intel 810 and 815 chip sets.

Some industry observers suggested Nvidia's entry into the integrated-chip set market could pressure Intel to finally upgrade the 752 core, perhaps by buying rights to existing technology or by investing in or even acquiring a graphics-design company.

Nvidia is said to be eager to take its technology against a budding field of rivals in Taiwan, which are also pushing to serve the bottom rung of the PC market with multifunctional, lower-cost components.

That plan will likely see the company compete against leading Taiwanese chip set vendor Via Technologies Inc. as well as Silicon Integrated Systems Corp. (SiS), both of Hsinchu.

Via's efforts are untested as it is just coming out with its first integrated-graphics chip set using the Savage 3D core from S3 Inc., Santa Clara, Calif. And SiS, which is an exclusive supplier of integrated-graphics chip sets, has lost market share this year, according to Dean McCarron, an analyst at Mercury Research Inc. in Scottsdale, Ariz. Sources said Nvidia is hoping to step into that breach.

What's more, Nvidia will find itself in the same market space as current partner, Taipei-based Acer Laboratories Inc. (ALI), which uses Nvidia's older TNT core in its integrated core-logic/graphics chip set. Nvidia's agreement with ALI doesn't prevent it from developing and selling competing integrated chip sets, sources said.

The chip set strategy would be a new one for Nvidia, which has a tradition of serving higher-end graphics applications. The company has moved aggressively into the mainstream in the past few years, and is currently in a dead heat with Intel and ATI Technologies Inc. in the lead for the integrated-graphics-core market.

For the six months ended July 30, Nvidia reported sales of $319 million, up from $149 million for the same period a year earlier. Net income of $41 million was triple the $13 million posted in the first half of 1999.

The integrated-graphics chip set would also sit at the opposite pole from Nvidia's other major design effort: the NV25 processor, which is slated to drive Microsoft Corp.'s X-Box electronic-game player. Where the core-logic design pulls the graphics core into the north-bridge controller, the NV25 aims to eliminate the north bridge by incorporating the controller into the graphics processor. By doing so, Nvidia hopes to trim costs and boost performance by enabling the graphics card's 128-bit-wide bus to handle all systemwide memory functions.