Nvidia's Tegra has gained a decent amount of popularity in recent months. It currently forms the brains of Microsoft’s Zune HD and is poised to capitalize on smartphones too. With the company hoping its system-on-a-chip product to account for as much as 50% of their revenue in the next few years, it comes as no real surprise to learn a successor is already on the works.

According to Fudzilla's “high ranking industry sources,” Tegra 2 is expected to drop in 2010 with basically twice the computational and graphics power of its predecessor. The updated chip will reportedly feature a dual-core ARM9 CPU, whereas the existing Tegra uses the ARM11 platform, and GeForce 9 based dual GPUs for a superior graphic performance and perhaps mobile PhysX.

As expected, the main target for this new chip will be the smartphone market, but Nvidia also hopes to draw interest from the automotive industry, media-player segment and other portable electronic manufacturers.