Wolfson's key role in latest generation of smartphones

CHIPS made by Edinburgh-based Wolfson Microelectronics will be included in the next generation of smart phones and tablet computers after the company signed a deal with industry giant Nvidia.

One of Wolfson's power-management chips is to be used as part of Nvidia's Tegra 2 processor, dubbed the "world's first mobile super chip" because it will double the speed of internet browsing.

On the back of the deal, tablet and smart phone manufacturers are now expected to contact Wolfson to work out how best to include its WM8325 chip into their devices.

The Scottish company - which was spun out of Edinburgh University in 1984 and floated on the stock exchange in 2003 - already makes chips for phone manufacturers such as Samsung and LG.

Tegra 2, which was unveiled last month at the Consumer Electronics Show in Las Vegas, has already been selected by LG for use in its new Optimus 2X smart phone.

Other manufacturers signed up to use the processor include Acer, Dell, Google, Samsung, T-Mobile and Toshiba.

Derek Milne, the company's product marketing manager, told The Scotsman: "It's too early to tell how big a deal this could be for us because the Tegra 2 has just being released.

"But Nvidia is up there at the top of the market so we're delighted with this partnership."

The global smart phone market was worth about $100 billion (62bn) last year and is expected to rise to about $140bn this year.

The tablet market - which includes products such as Apple's iPad - was worth around $12bn in 2010 and is predicted to jump to about $33bn in 2011. Wolfson believes its WM8325 chip can improve battery life by 10 per cent, a key consideration for smart phone and tablet computer manufacturers.

Milne explained that the chip puts smart phone components to sleep when they are not needed, powering them up again when a call comes in or when a user selects an application.

Wolfson's chips are also used in a wide-range of electronic devices, including Microsoft's Xbox games console and its new Kinect controller, the Sony PlayStation Portable (PSP) and Amazon's e-book reader, the Kindle.

News of the deal with Nvidia comes ahead of Wolfson's results on Tuesday for the year to 31 December, which are expected to show pre-tax losses widening from $6.7m in 2009 to $9.7m, despite turnover climbing from $121.3m to $156.5m.

The wider losses follow a weak first half and are expected to come despite Wolfson swinging back into the black during its third quarter for the first time in two years.

Last February the company confirmed it had lost a key contract with computing giant Apple in 2008 after missing deadlines.

But the company has since refreshed its range of products and has been making headway in the high-definition audio chip market.