Nvidia has won the contract to supply Nintendo with chips for the next edition of its ultra-popular DS handheld gaming device. The chip in question will be the Tegra - a "system-on-a-chip" processor which comes in two editions - a 65nm one and a new 40nm second generation option due to be launched in early 2010.

The Tegra currently only powers two devices - Microsoft's Zune HD and Samsung's BeatPlayer YP-M1 portable media players. Reviewers have showered the performance of the Zune HD with praise, though, and it's unlikely that fact escaped Nintendo's attention when deciding which platform to go for.

The device that results should be showing up in late 2010, according to sources quoted by Bright Side of News, perhaps surfacing at the Tokyo Game Fair. Whichever Tegra option Nintendo goes for, this will mean a big step up in the power of portable gaming devices - it should be able to power higher resolution screens on the handheld while providing improved battery life.

It's still up in the air at the moment, but when we hear something more concrete about the DS, we'll be sure to let you know.