Even though Nvidia has been quite successful with its GeForce 9400M chipset, which has been broadly adopted by Apple and several other laptop makers, the graphics firm today officially confirmed what many already suspected: it will put further chipset development on hold in the wake of licensing issues involving Intel's Nehalem-based processors.

The two have been battling it out in court since February over the terms of a 2004 chipset licensing agreement, which Intel claims doesn't extend to processors with an integrated memory controller -- like the Core family -- while Nvidia is firing back with accusations of breach of contract.

Nvidia will continue to market Ion for low-cost netbooks and nettops, but with Intel's upcoming Pine Trail platform moving a basic graphics core onto the CPU die, things are not looking good for them in this space either. The company will reportedly counter with a discrete Ion GPU that will remove the MCP features to lower costs, and play the 'GPU-accelerated Flash' card, but we'll have to wait and see how that works out.

Furthermore they are ceasing development of chipsets for AMD processors, noting a lack of demand for such products; not to mention they also plan to release microprocessors with integrated graphics cores. All in all, Nvidia stands to lose quite a penny here, considering the company's chipset business accounted for 31% of its $776.5 million revenue in the second quarter of fiscal 2010, which ended in July 2009.