to be compatible with Vista, which is scheduled to be released in the second half of calendar 2006. We believe that in the upcoming year there will be increased demand for HD video, and that Sony PlayStation3 will be a key driver of demand for HD and Blu-ray video. We expect HD and Blu-ray video to promote increased demand for the video processing capabilities of our next generation GPUs.

MCP Business

In April 2005, we announced the availability of our NVIDIA nForce4 SLI Intel Corporation, or Intel, Edition MCP for Intel platforms.  This line of core-logic solutions incorporates a host of new and innovative features that have never before been available on the Intel platform and extends the NVIDIA nForce brand into new segments.  In addition, during the first quarter of fiscal 2006, we shipped the NVIDIA nForce Professional MCP in its first enterprise server platform. 

In August 2005, we announced that the NVIDIA nForce4 SLI X16 Intel Edition technology featured in the Dell Dimension XPS 600 desktop PC was immediately available.

In September 2005, we introduced and shipped the NVIDIA nForce 400 MCP and GeForce 6100 integrated GPU family. This represents the first integrated GPU solution to support DirectX 9.0 Shader Model 3.0 technology. We expect this integrated solution to be an important new growth factor for our GPU and MCP businesses.

In December 2005, we announced our intent to acquire ULi Electronics, Inc., or ULi, one of the PC industry’s most highly regarded core logic developers. On February 20, 2006, we completed the acquisition of ULi. The acquisition represents our ongoing investment in ULi’s platform solution strategy and is expected to strengthen our sales, marketing, and customer engineering presence in Taiwan and China.

In January 2006, we shipped the NVIDIA nForce 4 SLI XE and NVIDIA nForce4 Ultra Intel MCPs. These products represent our first discrete chipsets targeted at mainstream Intel-based motherboards.



Our NVIDIA nForce product line has achieved record revenue for six consecutive quarters.  We believe that Advanced Micro Devices’ transition to K8, our extension into new segments, and our entry into the Intel market with our first ever mainstream Intel nForce4 MCPs will make our MCP Business one of our fastest growing businesses. Furthermore, we believe that our ability to simultaneously innovate using our GPU, MCP, and software knowledge base will allow us to make additional platform innovations in the future. 



Handheld GPU Business

 

Our strategy in the Handheld GPU Business is to lead innovation and capitalize on the emergence of the mobile phone as a versatile consumer lifestyle device.  Our initial focus was on 3G cellular phones.  Through the first half of fiscal 2006, our Handheld GPU Business was heavily concentrated at one original equipment manufacturer, or OEM, and its products did not achieve the anticipated level of commercial success.  However, during the third quarter of fiscal 2006, Motorola Inc. and Sony Ericsson Mobile Communications AB launched 3G models of their RAZR and Walkman portable phones, respectively, that are both powered by our GoForce GPUs.



Our GoForce handheld GPUs are