Chip maker Nvidia will power new mobile devices made by HTC, the maker of the popular 'Touch' series handsets, as it moves to shore up what could be a disappointing 2009.

The maker of popular Geforce graphics cards -- technology enabling computers to render 3D imagery -- is pushing a new Tegra processor that is aimed for mobile devices and lower powered Netbooks. The new platform comes at time when other core Nvidia business are expected to see a slow down.

We believe that HTC has selected the NVDA Tegra applications processor for a new handset design that will ramp in [the second half of 2009], Doug Freedman of American Technology Research says.We estimate Tegra could add $100M to 2H09 results.

Announced in early 2008, Tegra puts an Arm-based processor core, a GeForce graphics core and other components onto a single chip. The product lineup will include the Tegra 600 running at 700MHz and the Tegra 650 running at 800MHz. The lineup also includes the Tegra APX 2500.

This revenue will likely be very high margin, given the low-power design in a small-profile package is helping HTC achieve small form factors, Freedman adds. We expect Tegra to sell in a range of $15 to $25 and have more than one customer in '09.

Nvidia is suffering from a slowing global consumer demand. The firm's new GTX295 -- announced at CES this year -- will likely regain the price performance crown in the GPU market, but the reward will likely be muted given the weakness of the high-end consumer. Market demand is for low-end mainstream, causing a mix shift to lower revenue and margin products, Freedman says.

Freedman contents basic business metrics are likely all very poor: revenue, margins, and inventory (driven in large part by the collapse of desktop enthusiast GPUs). Weakness is likely to persist into a seasonal soft period,

We continue to recommend that investors avoid the PC-related semiconductor food chain due to the incredibly challenging short-term environment, though we remain optimistic on long-term design wins, stable pricing, and eventual inventory replenishment providing a floor of support.

AmTech maintains a neutral outlook on Nvidia, and reduces their price target to $7 from $8.50.

Shares of Nvidia fell 36 cents, or 4.54 percent to $7.57 by mid-day trading.