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March 10, 1997, Issue: 1048
Section: News
Divvying Up DVDs
By Jack Robertson
Tokyo - Right now there are precious few movie titles for DVD players.
But there is plenty of real-life drama to be had as U.S. and Japanese
DVD contenders jostle for market position.
Japanese semiconductor companies are eyeing DVD as a means of
driving chip sales. But the first Japanese DVD chip sets include up to
seven different devices at a cost that is a little higher than what consumer
electronics OEMs are comfortable with. Highly integrated one-chip or
two-chip solutions are needed to get the price down to attractive levels.
Several U.S. companies, including ATI Technologies Inc. and C-Cube
Microsystems, have unveiled single-chip DVD decoders and driv-ers.
But Japanese DVD producers aren't rushing to sample the Yankee chips.
In fact, Japan Inc. seems to be making it as hard as possible for the U.S.
device companies to break into the DVD chip market.
Roger Mathus, executive director of the Tokyo office of the
Semiconductor Industry Association, said that independent chip makers
seeking a license for the Japanese-developed DVD encryption standard
are required to license technology for an entire DVD product.
"Vertically integrated Japanese electronics companies already have the
encryption rights for chips as part of their overall DVD system," Mathus
said. "An independent American chip company, however, is penalized
heavily by being forced to license the entire DVD product design even
though it is only the chip encryption algorithm that they need," he said.
Mathus said Japanese companies are trying to block foreign chip suppliers
from the DVD market until their own semiconductor divisions can come
up with competitive single-chip products.
The DVD encryption standard developed by Matsushita Electric
Industrial Co. Ltd. and Toshiba Corp. is still a sticking point, despite a
much-touted industry agreement last year.
Debate still rages over whether the code can be easily broken, negating
any copyright protection. Also at issue are copyright safeguards that block
retransmission of DVD content over the Internet.
Meanwhile, Japanese PC companies are hoping to get a jump on the
computer market by introducing the first models with the DVD-ROM
drives produced by sister divisions. So far this hasn't been much of an
advantage because software on DVD-ROM disks is almost nonexistent.
The development of the DVD is becoming the industry's longest-running
soap opera. Stay tuned.
Those that have chosen to go with CUBE early should have a nice price advantage |
