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Technology Stocks : C-Cube

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To: DiViT who wrote (33635)6/5/1998 2:26:00 PM
From: BillyG  Read Replies (2) of 50808
 
AC-3: The Sound Of Success

Chipmakers hone in on AC-3 as enabler of powerful audio systems

From the Semiconductor pages of Electronic News: June 1, 1998 Issue

By Peter Brown and Gale Morrison

San Jose--Digital signal processors (DSPs) are taking the market by storm as they provide an
avenue to increases in performance and functionality, with DSPs that support multiple features
becoming a staple of the electronics market. One area that is booming because of this move to
multi-function ICs is the audio chip market for both professional and consumer applications.

Much of the heat being generated in the consumer and professional markets is in applications such
as Virtual Surround Sound and music studio mixers, digital versatile disc (DVD) and high
definition television (HDTV). At the core of most of these applications are high performance,
multi-function DSPs, digital-to-analog converters (DACs), A-to-D converters (ADCs) and digital
codecs (decoder/encoders) or sometimes a combination of all four.

What is really driving the consumer electronics market, however, is the switch in applications to
multi-channel Dolby AC-3 compression. Satellite broadcasting, HDTV, DVD and other
consumer electronics systems are now using AC-3 for audio. AC-3 is a compression algorithm
that transforms 5.1 channels of bit stream audio into a single bit stream at CD-quality at a
compression/performance ratio of 13- or 14 to 1.

This allows these consumer electronics devices to have powerful high quality audio while not
consuming performance bandwidth. Because of this compression, however, these consumer
applications need an integrated, powerful audio processor to decompress the stream so the sound
comes out clear. Providing these multi-function, high performance ICs are Texas Instruments,
Motorola, VM Labs, Aureal Semiconductor, C-Cube Microsystems and others.

Creating A Need

"One of the areas in the consumer space that has always lacked a need was the stereo sound.
However, now that need is growing and being filled by digital audio ICs," said Michael Bolcerek,
president of Desper Products, a division of Spatializer Audio Laboratories. "Receiving more of a
multimedia audio experience is enabling a more complete total body experience. It's not all just
visuals anymore."

One of the areas where Spatializer plays--and many others are entering--is the virtual home
theater area or Virtual Surround Sound market--where instead of a five-channel Dolby surround
sound, a home is equipped with two speakers that provide the same environment with less space.

"Having the audio experience out of two speakers seems to be more appealing than a full
multi-channel five speaker system that consumers either don't have the space for or don't want to
wire their house for," said Mr. Bolcerek. Spatializer is also moving toward headphones with the
capability to give you the surround-sound sensation as well.

Beyond surround sound lies the trademarked Circle Surround that is being developed by Analog
Devices Inc. (ADI) and engineer Derek Bowers. The latest version, Circle Surround 5.2.5,
allows audio engineers who employ both the encode and decode ICs to place any voice,
instrument or sound effect at any predetermined location within the 360-degree-radius
surrounding the listener, according to ADI. The company is producing Circle Surround 5.2.5
decoder ICs for OEM applications in both analog and digital form.

One of the ways that this type of Virtual Surround Sound and Circle Surround may be
proliferated is through the transition to HDTV and DVD players expected to begin in 1999.

DVD Driving Development

Dolby Labs' (literally a household name in sound) AC-3 has also been adopted as the audio
format for HDTV, digital cable TV, direct satellite broadcast (DSB), Virtual Surround Sound and
DVD. Dolby has certified numerous audio ICs from companies such as ADI, C-Cube
Microsystems, TI, Motorola, National Semiconductor, ESS Technology and many others for
AC-3.

With all of these consumer electronic applications and companies now digitally enabled with
Dolby AC-3 technology, is the proliferation of these new audio products far behind? Some might
say it's already here in the DVD space. Not only are DVDs driving a need for better audio
capability, the systems themselves require integrated digital audio ICs in order to drive this high
quality sound.

Norwood, Mass.-based ADI has long held a comfortable position in ICs for professional audio
equipment; the company has broad relationships with Dolby Labs and the Harman group of audio
equipment suppliers. ADI now aims to move some of that engineering expertise into higher
volume applications, like standalone DVD players and other "prosumer" applications like home
digital mixing boards.

Also coming to market now are the SSM2275/2475 dual audio op amps, priced at 80 cents and
$1.40 respectively, in OEM quantities. Both are ADI proprietary components that, like other
converters the company produces, are required in DVD systems. The '2475 is scheduled for
release in 2H98.

Ken Nevard, ADI product marketing manager for digital audio products, has just returned from
Amsterdam, where ADI introduced a new AD1855 stereo audio DAC priced at $3.95 each in
10,000-unit quantities. This part is "already designed into a lot of DVD players," Mr. Nevard
said. "But the performance it offers (113 decibel dynamic range and SNR), are allowing
professional equipment makers to employ them as well," for mixing consoles and home studios.

More on the DVD consumer side is ESS Technology, with its ES3120 MPEG-1 audio and
ES4208 AC-3 audio devices targeting the video CD (VCD) and DVD markets, respectively.
According to Tai Nguyen, director of marketing for consumer products at ESS, integration of
audio devices and other components in these consumer electronics is the key. The Video CD
market, which is mainly located in Japan and China, uses MPEG-1 audio for Karaoke playing
and for the high quality audio in VCD movies and the DVD chip utilizes the AC-3 standard.

"There are a lot of pirated discs in China so the quality of the audio and video is not that great, so
it is necessary for these VCD players to play these poorly formatted discs as well as high quality
ones," said Mr. Nguyen. "For DVD, cost is also the issue, so by integrating the audio portion in
with the video we can save end-users and DVD player manufacturers a lot of money."

Mr. Nguyen said one possible way to stimulate the consumer market for DVD players is the
move by PC makers into DVD-ROM drives. By enabling DVD on the PCs, DVD players
become more attractive because you can cross-use them, he added. C-Cube and
STMicroelectronics are also known for enabling audio and video in DVDs.
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