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Graphics chip giant Nvidia chief executive Jen-Hsun Huang said in a conference call with analysts today that consumers realize “a great tablet is better than a cheap PC.”

That’s an interesting statement coming from a PC industry leader who plays in both the PC and mobile markets. But Huang pointed out that in the most recent third fiscal quarter ended Oct. 28, 30 percent of Nvidia’s revenues now come from non-PC chips, up from just 3 percent three years ago.

Nvidia’s Tegra graphics-processor chips for mobile devices are grabbing solid market share in tablets and smartphones. Net income in the quarter was $209.1 million, 0r 33 cents a share, up from $178.3 million, or 29 cents a share a year earlier. Revenues were up 13 percent to $1.2 billion. Analysts had expected earnings of 30 cents on revenues of $1.2 billion.

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Huang said that orders for Tegra chips for Google Android and Microsoft Surface tablets are helping offset a slump in demand for PCs, which use Nvidia’s graphics chips. Tegra is also used in new Lenovo and Asus tablets, among others.

“Our fundamentals are better than ever,” Huang said. “We’re increasing our share. The PC end market is uncertain. We’ll take a rather cautious approach to our outlook.”

Huang said that Nvidia is also executing well on the rollout of its Kepler-based graphics chips and is taking market share from rival Advanced Micro Devices. Huang is essentially doing a pretty good job of riding two horses at the same time without falling off. The PC market is 70 percent of his business, but it’s slowing down while the tablet and smartphone markets are growing.

Nvidia hasn’t seen much cannibalization in its markets because “we don’t really play in the cheap PC market.”

The bright spot is PC gaming, where players are buying advanced PCs with graphics that are much better than the current generation of game consoles.

For the fourth fiscal quarter ending at the close of January, revenue is expected to rise to $1.03 billion to $1.18 billion, Nvidia said. Analysts had estimated $1.21 billion for that quarter. Its shares are up 1.7 percent in after-hours trading to $12.90 a share.

Nvidia is investing heavily in a 4G LTE modem chip and in its next-generation mobile processor too.

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