Graphics chipmaker Nvidia Corp. on Monday announced a major expansion into the wireless sector with a $70 million deal to acquire handheld graphics chip specialist MediaQ.

The Santa Clara, Calif.-based Nvidia, which commands the market for high-definition 2-D and 3-D graphics processors, said the all-cash deal would extend its platform reach and speed up its entry into the wireless mobile markets.

The acquisition has been approved by both companies' board of directors and is expected to close in the third quarter this year.

MediaQ, a privately held firm which launched in 1997 with backing from National Semiconductor, Weston Presidio Capital, Summit Accelerator Fund, Infineon Technologies, El Dorado Ventures and ViVentures, markets chip technologies, drivers for the major handheld providers, including Microsoft PocketPC, SmartPhone, Palm and Symbian.

MediaQ's flagship technologies are used to enhance visual display capabilities on wireless devices. Customers like Mitsubishi, Siemens and Dell Computer use MediaQ to improve connectivity and minimize chip and system-level power consumption.

With the deal, Nvidia expands its graphics muscle into the handheld mobile space. "MediaQ has made significant penetration and created strong relationships with key technology leaders in the areas of handsets, LCD displays, and PDAs, all essential ingredients in the 3G mobile multimedia revolution," said Nvidia CEO Jen-Hsun Huang.

The acquisition comes as Nvidia is redoubling its efforts on the nForce platform processor. Earlier this year, the company also scored a multi-year deal with IBM to manufacture some of Nvidia's GeForce chips using the 130-nanometer process.