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Tuesday, December 09, 2003
Chip makers jockey as DVD recorder tags prepare to tumble

DVD recorders are threatening to go mainstream as Chinese and Taiwanese manufacturers compete to push unit prices to as low as $200 in the next year.

Leading chip suppliers for DVD recorders, like Philips Semiconductors and LSI Logic, are now predicting the $200 threshold in late 2004, a development that will surely encourage low-wage Asian manufacturers to jump on the DVD recorder bandwagon. This, in turn, is expected to bring the huge domestic Chinese market into play.

Fully aware of the China factor, both Philips and LSI Logic this month are rolling out their second-generation DVD recorder ICs--highly integrated single-chip MPEG-2 encoder/decoder devices priced at less than $25 in volume.

Philips Semiconductors hopes to differentiate its MPEG-2 codec from others by using 0.12-micron manufacturing technology. While the first samples are being produced in Crolles, France, where the Dutch giant shares a fab with STMicroelectronics and Motorola, the company is planning high-volume mass production on 12in. wafers either in Crolles or in one of the facilities of foundry partner Taiwan Semiconductor Manufacturing.

Philips Semiconductors' DVD recorder chip is tightly coupled with its optical engine and the DVD+RW format of its parent company, Royal Philips Electronics. The upshot is that Philips Semiconductors can offer OEMs a complete software stack that is proven by its lead customer.

In contrast, LSI Logic offers DVD recorder ICs that can be deployed across competing DVD-recordable formats, with "more flexibility and independence" in terms of choice of components, said Jim Fox, director of marketing for DVD products.

LSI Logic's DVD recorder chip has been designed into a number of OEM systems, including those from Apex, JVC, LG, LiteOn, Samsung, and Zenith, many of which support different DVD-recordable formats, are deployed with varying feature sets, and are sold in different geographic markets.

In fact, LSI Logic's chip is already found in low-cost DVD recorders ranging from $299 to $399, and is available in major retail chains like Wal-Mart and Target.

According to predictions, the global DVD recorder market will increase from 1.3 million units last year to 4.4 million units in 2003. That number is projected to more than double to 10 million units next year, and jump to 19 million in 2005.

Despite such market potential, fewer semiconductor companies are active in the DVD recorder sector, compared with those engaged in cutthroat competition in the DVD player market. The top four DVD recordable IC suppliers today are Matsushita, Philips Semiconductors, LSI Logic, and Cirrus Logic.

And while the usual suspects like Zoran and ESS are in the DVD recorder market, they lack their own MPEG-2 encoding technology. Abraham said that although Zoran and ESS have licensed NEC's MPEG-2 encoding technology, they don't seem to be as far along with integrating features onto fewer ICs to reduce cost.

The gap between them could widen further, as LSI Logic, whose MPEG encoding technology is already in its fifth generation, continues to hone its encoding skills, while Philips is adding to its new MPEG-2 codec optimized hardware blocks for running new picture improvement algorithms such as adaptive picture sharpness detection and de-blocking artifacts removal.

The increasing number of new features required for DVD recorders is another factor that hampers many chip vendors.

However, there is a list of must-have features that new DVD recorder ICs will need to support in the near future: DV transcoding for transferring DV camcorder content; hard drive interfaces for combo products; transcoding from high-definition to standard-definition recording; and transcoding to WindowsMedia9 or H.264 for keeping high resolution.

Currently, most chip companies other than LSI Logic and Philips Semiconductors are using two-chipset solutions for DVD recorders by pairing a new encoder IC with an older-generation decoder IC originally developed for DVD players. Besides the obvious differences in the number of chips required for a system, a one-chip solution can offer unified memory subsystem architecture, providing "subtle but important differences" in actual DVD recorder feature sets.

Because of internal architectural improvements made in its second-generation DVD recorder chip, called PNX-720, Philips has reduced the required memory bandwidth for DVD recorder applications from 32- to 16-bit, allowing customers to utilize one SDRAM unit at 16-bit width, instead of two SDRAM units to reach 32-bit width.

LSI Logic's new DVD recorder system processor, called DMN-8602, has integrated a NTSC/PAL TV encoder for a reduced bill of materials, the company said. It also incorporates a USB controller that allows connectivity with digital still cameras, digital audio players, and printers, for the viewing, listening, archiving, and printing of JPEGs or video or audio files.

The DMN-8602 also features a DV codec, simplifying the transfer of personal digital content from a camcorder to DVD over FireWire. LSI Logic's DVD recorder system processor is capable of playing back MPEG-4 video.

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