There was a rumour running last month about Nvidia potentially acquiring VIA to avoid getting stumped on by the growing graphics giant that Intel is becoming; but now it seems certain that VIA and Nvidia will collaborate instead for now.
According to Digitimes, both companies have signed a "cooperation agreement" which will see VIA's C7 and C8 processors paired with Nvidia's own IGP to form a new VN platform to "target Intel's NetTop, Netbook and Mobile Internet Devices".
Sources at motherboard manufacturers - who are always well informed - also said that both parties are currently struggling against Intel's recent inroads in their respective markets and are coming together for strategic reasons.
It will also be interesting to see how VIA's C8 processor will perform with Nvidia's designs; Isaiah's 64-bit architecture is based on a completely new architecture which is probably why VIA and Nvidia need some time to solve any issues.
The first products bearing the VN banner will appear in Q1 2009 which could be too late if Intel decides to ramp up the production of Atom processors and swamps the market with ultra-cheap designs.
The partnership could also have significant implications for VIA's S3 graphic and chipset departments which are outclassed by Nvidia's equivalent solutions.