What processes the sound when using the GPU's HDMI output?

r3tox

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Oct 3, 2010
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I was under the impression that the soundcard (onboard or not) processes the audio and sends it the the GPU's HDMI output. am I mistaken?
If I use my GPU's HDMI output (HD4350) connected to my receiver would I not benefit from upgrading to a decent soundcard?
Obviously I would be able to output just the video from the GPU and connect the sound card to my receiver but I'd like to know what handles the sound processing when outputting both the video and audio from the GPU's HDMI.
 
According to AMD/ATI the HD 4350 has an integrated HD audio controller with up to 2 channel 48 KHz stereo or multi-channel (7.1) AC3 enabling a plug-and-play cable-less audio solution. This integrated audio controller is subject to digital rights management limitations; maximum supported audio stream bandwidth is 6.144 Mbps.