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Pair of small players will deliver advanced two-way digital cable solutions -- Broadcom, QED get nod for GI set-top chips
By Junko Yoshida
Horsham, Pa. - General Instrument Corp.'s selection of two relatively low-profile vendors-Quantum Effect Design (QED) and Broadcom Corp.-as silicon suppliers for its next-generation digital cable set-top boxes shows that small companies can still be big players in the emerging set-top market. GI's choice also reflects a midgame rewriting of the rules as the CableLabs industry consortium's OpenCable specs come together and as Microsoft Corp.'s Windows CE strategy throws set-top developers a curve.
QED (Santa, Clara, Calif.), a design house for high-speed, high-performance MIPS RISC processors, will supply the CPU for GI's advanced two-way digital cable platform, the DCT-5000. Broadcom (Irvine, Calif.), a renowned telecom-chip vendor that's a relative newcomer to the markets for MPEG and graphics set-top silicon, will supply a broad-ranging solution for the set-top that may include all functions except the CPU and memory, according to a recent filing with the Securities and Exchange Commission. The deals could potentially involve 15 million set-tops.
Broadcom is a leading market player in QAM demodulators, forward-error correction chips and Multimedia Cable Networking Systems (MCNS)-compliant chip sets. With the OpenCable initiatives moving forward at the CableLabs industry consortium, the MCNS-compliant cable modem has become a basic feature for advanced two-way digital set-top boxes. That has partly shifted the silicon challenge from the MPEG-2 video and Dolby Digital decoding functions on which the established ASIC houses have built their set-top businesses.
GI has an immediate need for a complex communication solution including the upstream, downstream and MAC chips. That opens the door for Broadcom to expand its business from telecommunications chips to integration of set-top digital audio, video, graphics and front-end communication silicon, according to president and chief executive officer Henry Nicholas. Broadcom has targeted a mid-1999 rollout for a chip that will integrate all set-top silicon except the CPU and memory.
Similarly, Microsoft's relentless efforts to marry its Windows CE operating system to the WebTV architecture and drive it into the digital living room has helped open the set-top CPU market to QED and its RM5230 MIPS microprocessor, which supports Windows CE (see March 30, page 30). GI will use the RM5230 in the DCT-5000.
Founded as a custom microprocessor design house in 1991, QED has designed multiple generations of high-performance, cost-effective 32- and 64-bit embedded microprocessors. Its R4670 was chosen for WebTV's Internet TV/set-top box, according to QED marketing vice president Rick Kepple.
Jon Cassell, senior industry analyst at Dataquest Inc. (San Jose, Calif.), commented that "QED is your ideal choice, if you are looking for a partner with hot-shot MIPS designers."
QED's Kepple also claimed that through manufacturing agreements with Taiwan Semiconductor Manufacturing Co. (TSMC) and IBM, QED has made a successful transition from design house to a fully established fabless semiconductor company. He said the company can turn around high-performance but very cost-effective MIPS processors for the consumer market.
QED describes the RM5230, designed into GI's DCT-5000, as a 64-bit MIPS microprocessor with a 32-bit system-bus interface to enable workstation-class performance at a cost suitable for consumer applications. It will provide "soft modem functionality and voice-over-telephony technology, in addition to a wide range of graphics capability," Kepple said.
When asked whether GI had made a financial investment in QED, Kepple said it had not.
GI's announcement also identified Motorola's s 68331 processor as the CPU for the current-generation, DCT-1000 and DCT-1200 digital set-top boxes. The DCT-2000, the next evolution of DCT-1000 and -1200, will employ a double-clock-speed 68331 starting later this year, said David Fritch, senior manager of marketing strategy at GI.
But Motorola was passed over for the DCT-5000. Motorola was asked to comment for this story but did not return calls by press time.
GI has not disclosed exactly how it intends to partition the functions inside the DCT-5000 box. Broadcom, however, appears to have an inside track.
Currently in registration to go public, Broadcom has disclosed in its filing to the SEC that it issued and sold 1,500,000 shares to GI for $22.7 million in September. In connection with that financing, GI and Broadcom entered a development, supply and licensing agreement under which GI granted Broadcom royalty-bearing, nonexclusive, worldwide license to use its MPEG and related technology. Broadcom, for its part, agreed to develop ICs for GI's digital cable set-top boxes and to supply the chips to GI for four years.
According to the SEC filing, GI agreed to purchase from Broadcom 100 percent of all the chips (except for the CPU and memory) required for set-tops that GI will ship in 1998. Those chips involve transmission, communications and video decompression (MPEG) functions. The percentage of product requirements that GI must purchase from Broadcom, however, declines each year over the term of the agreement, to 45 percent in 2001.
Having gotten access to MPEG technology from GI, Broadcom has been quietly expanding into the graphics area to move closer to its ambitious goal of a single-chip set-top solution. According to Nicholas, Broadcom late last fall snatched up a small graphics-chip firm called Azuron Systems (San Jose), a spin-off of interactive-TV-platform company PowerTV Inc. (Cupertino, Calif.)
Headed by Sandy MacInnis, a former vice president of hardware development at PowerTV, Azuron has been working on a new graphics-chip technology for the TV platform. Since working at Kaleida in early 1990s and later at PowerTV, MacInnis has been instrumental in the design of advanced ASICs capable of compositing graphics with video, digital video scaling, alpha blending and anti-aliasing of graphics and video.
As employees of Broadcom, MacInnis and his Azuron team are "designing from the ground up a new graphics chip that Sandy has always wanted to design," said Nicholas.
Broadcom remains confident of mid-1999 delivery of a single-chip set-top solution incorporating its cable modem and QAM receiver, an MPEG audio/video/transport decoder originally developed by GI and an advanced graphics engine to be developed by the former Azuron team.
GI's Fritch, however, said his company has "not named who is going to supply 24-bit graphics capability for the DCT-5000." He added that the graphics silicon could well be a separate chip.
Asked about a second-source silicon supplier for the highly integrated set-top chip solution, GI's Fritch said, "We are not looking for any specific second source right now. We've closely worked with Broadcom for a long time, and we're confident of our joint-development work."
As the share of Broadcom-supplied chip content goes down to 45 percent, there is room for other silicon suppliers to score design wins in GI's set-tops, Fritch said, adding, "We are not ruling anyone out right now."
But he noted that GI needed firm commitments from a few selected chip vendors to offer proven deliverables. "We have a contractual commitment and a development timetable to keep," he said.
GI recently announced long-term arrangements with leading cable-system operators, including TCI, to supply at least 15 million advanced digital set-tops.
Copyright (c) 1998 CMP Media Inc.
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