Forget everything you knew about mobile graphics – Nvidia’s Tegra 2 chip runs the Unreal Engine 3 with ease, delivers 3D performance of today’s high-end consoles, and enables days of battery life.

The Tegra 2 chip owes its processing performance to the use of ARM’s Cortex-A9 CPU, the latest and greatest in a series. Note that most smartphones run the Cortex-A8 chip, including Palm’s Pre, Apple’s iPhone 3GS, and Motorola’s Droid.

What blew us away was ARM’s recent performance video pitting a netbook with an Intel 1.6GHz Atom processor and a GPU versus a development board running only a 500MHz Cortex-A9 processor. The Cortex-A9 machine matched the Atom chip in browser rendering, even though it had no GPU and was clocked three times slower.

Graphics-wise, Tegra 2 delivers a huge bang for your buck. Epic Games’ CEO Tim Sweeny demoed the Unreal Engine 3 running on the Tegra 2 processor on stage at Nvidia’s press conference. Not only did the Tegra 2 system render the game with ease, but Sweeny proclaimed its 3D performance comparable to today’s high-end consoles. I’m sure a look at the demo, included here, will leave you speechless. Looks like 2010 will be the year of Tegra 2.

 

“It’s going to be the beginning of the tablet revolution,” Nvidia’s CEO Jen-Hsuan Huang told the media at the unveiling of the Tegra 2 platform (press release). Demoing a number of Tegra 2 tablet designs, Huang said the game-changing chip delivers 1080p video playback, ten times better performance than today’s smartphones, optimized Adobe Flash Player 10.1 rendering, and insane battery performance with up to 16 hours of HD video playback and 140 hours of music on a single charge.

 

Nvidia has sold the original Tegra chip to a few smaller vendors. If it weren’t for Microsoft and its Zune HD, the Tegra processor would have flopped. The company is now betting on the rise of tablets and portable computing devices unveiled at the CES, hoping to put the chip inside every gizmo with a screen size between five and ten inches. The category includes tablets like Apple’s iSlate (unless it opts for custom chips, as rumored), Google’s rumored Chrome OS-powered tablet, slates from HP and Dell – even next-gen handheld consoles like the follow-up to the Nintendo DS.

Even though Nvidia is facing tough competition in the mid and high segment from Intel’s Atom, performance and power metrics are on their side. Tegra 2 boasts full HD (1080p) video output and hardware-assisted rendering of processor-intensive content like Flash files without taxing your battery, making the chip a natural fit for portable entertainment devices that browse the web, like smartphones, tablets, and netbooks. Billed as “the world’s first dual-core, Cortex-A9 processor” Tegra 2 sports eight independent processor and is four times faster than its predecessor. All said, Tegra 2’s processing and graphics performance usher in a new era in mobile computing where upcoming devices will handle heavy-duty web browsing, HD video encoding and decoding, and mobile gaming with ease.