ELECTRONIC NEWS, July 20, 1998, p.20 "Intel, Microsoft Accords Give Sigma Designs Lift"....Sigma Designs has gone through much since it opened its doors in 1982 and the company has been struggling a bit in the last few quarters to grow its revenues and has slipped into the red in terms of profits.
However, this might be changing. With numerous design wins in the DVD (Digital Versatile Disc) market and, more recently, agreements with Microsoft and Intel in place, Sigma Designs is in a position to become a profitable company again.
Sigma for the most part is a DVD chip company. However, the company is also involved in other digital video operations. Known mostly in the industry for its DVD chips, Sigma said that with its design wins and agreements it forecasts a profitable future.
One component of Sigma's claim that profits will rise is the ramp-up of DVD-ROMs in PCs. According to Microsoft's PC99 specifications, PC OEMs are required to include DVD-ROMs to get Microsoft's coveted sign-off and seal of approval. This will not only move things along for Sigma Designs but for the content creators and application vendors for DVD.
"DVD is really going mainstream and the ramp-up has not been as fast as we anticipated. However, systems are now coming standard with DVD-ROMs and we will see some benefit really soon," said Thinh Tran, chairman and CEO of Sigma Designs. "We also see DVD-RAM stimulating growth in the market with the ability to write and erase DVD discs. With the costs coming down on all DVD products, content and drives, we see good things on the horizon."
The company is focused specifically on DVD for the PC market because Sigma sees the PC segment moving faster to accept DVD than the consumer space. Also, Mr. Tran says there are numerous players with their own fabs, able to generate high volumes and that is a big advantage in the consumer space. Sigma may at some point move to intelligent set-top boxes that include DVD but right now is focused on the PC segment and leaving DVD players in the consumer market to the "big boys," said Mr. Tran.
Following this focus, Sigma has formed relationships with both Intel and Microsoft. Although working with both companies for several months now, Sigma recently revealed what it is working on with the Wintel contingent.
Sigma's relationship with Intel will allow PC OEM's to offer a complete DVD hardware platform for under $30 using Sigma's chips. Sigma is participating in Intel's reference design for hardware DVD. A typical hardware offering in a PC is priced up to $150 so any price break is a welcome addition to Intel, Mr. Tran said. One of the characteristics that attracted Intel to Sigma was that its DVD chip connects directly to the VMI port, a graphics interface for PCs.
"DVD is going to be a standard check-off item here very soon in PCs and we believe you can't get the quality you want by using a software DVD solution," said Mr. Tran.
Sigma is also working with the other member of the Wintel contingent on getting streaming video into the Windows operating system. Microsoft has created an API called NetShow theatre that allows for streaming video to be piped into Windows 95/98. Sigma has been working with Microsoft on this digital video offering for approximately a year, Mr. Tran said. |
