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Chip makers eye
HDTV bonanza
Digital TV promises lush market
for mixed-signal vendors
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By Robert Ristelhueber
Imagine a scenario where the single most ubiquitous consumer electronics appliance--the television--will almost overnight be replaced or augmented in every household by a box with much richer semiconductor content. That promises to become reality in the United States in less than a decade when TV undergoes its most revolutionary change and moves to digital broadcasting, ushering in a potential windfall for vendors of mixed-signal and other types of semiconductors.
After years of discussions, negotiations and false starts, digital television got its biggest boost in April when the Federal Communications Commission (FCC) ordered broadcasters to switch their signals from analog to high-definition digital by no later than 2006. The transition has already begun, with a few stations already experimenting with broadcasting digital signals, and the first receivers could hit the market next year.
Some chip makers are salivating at the prospects of this new market. "It's a huge opportunity," says Jon Henderson, chief researcher at Hitachi America Ltd.'s Digital Multimedia System Lab, Princeton, NJ. "Every consumer will either have to buy a new HDTV [high definition television] receiver or a set-top box to preserve the utility of their existing receiver."
<Picture: 07TV>Making an impact
The impact on semiconductor vendors is clear, adds Glenn Pohly, Hitachi's communication systems manager of system products in Brisbane, CA: "If you count the number of existing receivers plus the televisions that are replaced each year, that's between 300 million and 500 million sets that will need some form of digital decoding."
Market researcher Dataquest, San Jose, recently forecast a $718-million semiconductor market for digital TV by 2002, four years before analog broadcasting is slated to be terminated (see chart, at right). "Eventually, you're looking at a giant market," says Dataquest analyst Jon Cassell, who believes that the initial surge will come in digital set-top boxes, which will enable analog sets to receive the new signals. Dedicated HDTV sets, which will feature much larger screens than today's analog sets, will be too expensive to attract a mass market for many years, he contends.
Taking care of the front end
Besides the market created by having to replace or upgrade every existing TV set, digital receivers will contain a much higher semiconductor content than analog sets. Front-end functions, which Cassell calls a "big opportunity for companies with mixed-signal expertise," will be performed by a tuner, analog-to-digital converter, demodulator and forward-error-correction circuits, all of which were either lacking in analog sets, or were in many cases simpler, lower-margin chips.
Other chips needed by digital TV receivers include a transport demux device--which sorts out and synchronizes the incoming audio, video and data--as well as video and audio decoders. The FCC chose the Motion Picture Experts Group (MPEG) 2 standard for video compression and decompression, and the Dolby AC3 standard for audio decoding. <Picture: 07MIX1>The first digital TV sets should hit the market in less than a year, according to Paul Snopko, left, of Zenith Electronics, which proposed the digital technology chosen by the FCC.
Chip makers also will need to supply graphics controllers, digital-to-analog converters, and microcontrollers. Current estimates are that 8 megabytes of dynamic random access memory (DRAM) will be required for video decoding and transport functions, although that figure could drop as OEMs try to find ways to make the sets more affordable.
The FCC chose a digital transmission technology called vestigial sideband (VSB), which was proposed by Zenith Electronics Corp., Glenview, IL. The first semiconductors used to demodulate the VSB signal will be unveiled this summer by at least two companies. One of them is LG Electronics, Seoul, Korea, says Paul Snopko, director of research and development for Zenith.
The first receivers for digital TV are just months away from introduction, he says. "I expect that this winter's Consumer Electronics Show in Las Vegas is when most companies will roll out their products, including Zenith," Snopko says.
Majority rules
FCC mandates are setting the pace, he notes. According to the rules, 53% of TV households must have access to digital broadcast signals by October 1999 and the 10 largest TV markets must begin digital broadcasting by April 1999. Broadcasters will likely offer both analog and digital signals until 2006, when the analog spectrum will be returned to the federal government for other uses.
Philips Semiconductor, Sunnyvale, plans to sample a VSB demodulator by the first quarter of next year, according to David Canha, manager of audio/video product sales. "We have HDTV working in our labs, but I wouldn't say there's anything that's production-ready, either from Philips or the competition."
As a captive supplier to one of the world's largest TV set manufacturers, Philips Semiconductors is keenly interested in the emergence of digital TV. The company is working on ways to adapt its Trimedia processor line for HDTV, and is also developing hardwired solutions for the market.
National Semiconductor Corp., a leading vendor of analog circuits, is looking to leverage its demodulation expertise in the cable and satellite TV arenas into digital television, says Andrew Jue, a systems engineer in the Home Connectivity Products Group in Santa Clara.
National has also begun sampling an MPEG 2 video decoder with integrated Dolby AC3 decode capabilities for set-top boxes. Meanwhile, its Mediamatics subsidiary is working on a more advanced video chip for digital TV. Jue agrees that most of the action will be in set-top boxes for a number of years: "It's a matter of whether consumers will prefer to pay $2,000 for an HDTV set or $250 for a digital set-top box for their existing analog TV," he says. It requires a 40-inch screen to get the full benefit of HDTV, and the cost of those displays is still too high, he adds.
Hitachi, which manufactures TV receivers as well as integrated circuits used by them, "is certainly committed to bringing receivers to market early on," notes Henderson. He declined to say what mix of chips Hitachi will make itself or consider buying for digital TV, but notes that the company is already selling a chip that can demodulate a digital video stream coming over cable lines.
Treading lightly
As a leading producer of video decoding chips, C-Cube Microsystems Inc., Milpitas, CA, may profit handsomely when digital television takes off. But the company is approaching the market cautiously until its acceptance becomes clearer. "We need to predict when HDTV [will pass] the 100,000-unit mark," says Didier LeGall, chief technical officer. Below that figure, "it's not such a good business to be in."
Digital TV will require a more robust MPEG 2 solution than is available today, LeGall says. C-Cube's decoder chips currently run at about 80 megahertz, a figure that will need to be boosted to 150-200 MHz, for digital TV. "We could have that in a year or year and a half if the market demanded it," he says. The company will need to tackle the issue of heat generation, since set-top boxes don't contain fans, he adds.
C-Cube is also investigating the video encoding side of the digital TV market, and expects to have chips for that function available by next year, LeGall says. While it doesn't represent the volume potential of TV receivers, there will still be an important market created for chip makers when digital TV cameras and broadcasting equipment are built.
The birth of digital broadcasting could give a big boost to the convergence of PCs and TVs. Personal computer makers hope to capture a chunk of the vast TV viewing audience by putting digital TV tuners in their systems. Traditional TV set makers, meanwhile, expect to offer data services once digital broadcasting begins. Chip makers stand to benefit no matter who wins. "As a semiconductor supplier, we sell guns and ammo to both sides. It doesn't matter to us," says Philips Semiconductors' Canha |
