ALi, a Taiwanese IC design company, has landed orders for its second-generation DVD player single chip from South Korea-based LG Electronics (LGE) and Daewoo Electronics, according to ALi president Chin Wu.

Shipments to LGE have started since earlier this month, while Daewoo shipments will begin in early 2004, Wu said. ALi’s second-generation DVD player single chip integrates servo, MPEG-2 decoder and RF IC functions. In addition, the company expects to launch its third-generation version supporting the MPEG-4 standard in the first half of 2004, he said.

Sales for the second-generation chip should pick up in the late first quarter of next year. In addition to orders from South Korea, ALi’s existing clients in China and Taiwan are expected to replace the first-generation solution with the new chip in the first quarter, he added.

Meanwhile, ALi expects to start sampling DVD recorder-use chipsets in the first quarter of next year. The company has also begun volume shipments of its set-top box (STB) controllers since earlier this quarter, mainly to China-based clients, Wu said.

The president confirmed that ALi, like many Taiwanese IC design houses, has suffered short capacity support from foundries. The company has not been able to fulfill all the orders since November, with the supply falling about 20% short of demand, Wu said.

Tight supply is expected to last through the first quarter of next year, but should be eased in the second quarter of next year. Currently, ALi has no plan to produce at foundries overseas, Wu said.