Looking to make a move in the ever growing mobile environment, Nvidia has acquired wireless baseband and RF chip supplier Icera for $367 million in cash.

By brining aboard Icera, Nvidia is getting a leading manufacturer of baseband processors for 3G and 4G cellular phones and tablets. Nvidia says with Icera in the fold, it is now able to offer the two main processors used in smartphones (the application processor and baseband processor). With this, it can help manufacturers improve their time to market and deliver the requirements of next-generation mobile computing.

This is a key step in NVIDIA's plans to be a major player in the mobile computing revolution, Jen-Hsun Huang, NVIDIA chief executive, said in a statement. Adding Icera's technology to Tegra gives us an outstanding platform to support the industry's best phones and tablets.

Nvidia estimates the market for baseband processors is $15 billion and will continue to grow due to the increasing interest in the smartphone/tablet market. Icera's software based processor allows for multiple products to be developed from from a common platform. This in turn, reduces development costs, accelerates time to market and secures a route to support future baseband standards.  

The company's biggest competitors, Qualcomm and Intel, are already both offering both application and baseband processors. Intel's acquisition of Infineon's wireless assets gave it access to that company's cellular baseband chips. Ambrish Srivastava, analyst at BMO Capital Markets, said it Nvidia clearly made the move to keep up with its competitors.

Nvidia has thrown its lot in the bandwagon of other applications processor suppliers that find it important to have a baseband offering in order to make bigger inroads in the mobility market, Srivastava said, before noting the lone semiconductor company that has ignored this market. Texas Instruments now remains as one of the only companies left that has an applications processor business without any internal baseband support, besides for Nokia,

Stifel Nicolas analyst Kevin Cassidy predicted, This will put Nvidia on equal footing with Intel and Qualcomm.

The purchase was approved by both companies' boards of directors and will close in 30 days. Nvidia's stock was up 1.50 percent, or 29 cents per share, from $19.32 at the end of Friday to $19.61 as of press time.

Follow Gabriel Perna on Twitter at @GabrielSPerna