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To: VidiVici who wrote (43433)	7/29/1999 2:12:00 PM
From: Black-Scholes	Respond to of 50808

MPEG-2 Decoder Market MPEG-2 video decoders are used in a wide variety of digital end-user products. Figure 1 on the following page represents Cahners In-Stat Group's taxonomy of all products that are likely to contain MPEG-2 video decoders. The products can be divided into the following categories: Network Connected: Digital Direct Broadcast Satellite receiver set-top boxes Digital Cable TV receiver set-top boxes Small Aperture Dish MMDS or LMDS receiver set-top boxes Internet Appliance set-top boxes Digital HDTV receiver and converter set-top boxes Published Media: DVD players Interactive game consoles Digital cameras The growth in the MPEG-2 decoder market is partly due to the arrival of DVD in the consumer electronics as well as the PC market. In the on-line network segment of the MPEG-2 decoder market, DBS receiver set-top boxes have been the driving force. During calendar 1998, unit shipments of DBS receiver set-top boxes increased over 40% from the six million units shipped in 1997. Though DBS receivers are contributing to most of the growth in the market, the growth in Cable TV receivers is helping as well. Within the next several years, Cahners In-Stat Group expects that digital TV sets and digital TV converter boxes will challenge DBS set top boxes as the top consumer of MPEG-2 decoder chips. [missing diagram] Though the MPEG-2 decoders used for published media and on-line network applications are similar, there are small differences. The MPEG-2 decoders for published media have been integrated with functions such as AC-3 decoding and copyright protection that are unnecessary in on-line network applications. Therefore, MPEG-2 decoders for on-line network applications are less expensive than their published media brethren. MPEG-2 Decoders for Published Media The primary application in the published media category has been DVD either the stand-alone players or drives for PCs. Many of the manufacturers' chips can be and are being used in both locations. In 1998, shipments of MPEG-2 decoders for SVCD players began as mentioned earlier. While some players in the MPEG-2 decoder market are offering the same chip for SVCD and DVD, most competitors have developed a separate chip without AC-3 decoding that is less expensive. While MPEG-2 decoder chips will continue to be necessary in DVD and SVCD players in the future, the PC DVD market will continue to move to software decoding over the next several years. The software decoding can either be implemented on the host processor or on the graphics chip. Trident and ATI have both announced graphics solutions that run most of the DVD playback functions in software on the host processor, but use the graphics chip for motion compensation. In 1998, manufacturers of MPEG-2 decoders continued to integrate functions such as audio decoding, sub-picture processing, and copy protection processing into their published media application chips. Some went even further in integrated other back-end functions like the CPU, NTSC/PAL encoding and the video DAC. All are in pursuit of a less expensive solution to offer OEMs.

To: VidiVici who wrote (43433)	7/29/1999 2:14:00 PM
From: Black-Scholes	Respond to of 50808

Go to the Yahoo thread for four more sections of this report.

To: VidiVici who wrote (43433)	7/29/1999 2:22:00 PM
From: Black-Scholes	Respond to of 50808

C-Cube shipped the greatest number of MPEG-2 decoders for published media in 1998 with over 4.5 million units. In 1998, C-Cube began shipping the CL8820 and CL8830, both MPEG-2 decoders that meet the Chaoji VCD standard. C-Cube's ZiVA DVD decoder line consists of the ZiVA-3, the ZiVA-DS, the ZiVA-PC, and the ZiVA-D6. The ZiVA-3 began shipping in January 1999. C-Cube has amassed design wins from Hitachi, Acer, JVC, Samsung, and LG Electronics for their DVD players. The shipments of MPEG-2 decoders for the Chaoji VCD market caused C-Cube's market share to increase from 16% to 51% in 1998. LSI Logic shipped 1.5 million MPEG-2 decoders for published media last year. LSI offers both the L64020 and L64021 for the DVD market. The L64021 includes the CSS capability on the chip. In 1998, LSI introduced the L64021C, which outputs DTS surround sound. A new generation of decoders that will handle DTS decoding on chip is expected in 1999. Rather than develop a SVCD chip, LSI has focused its efforts on helping Chinese suppliers bring DVD players to market. Their Chinese customers include Sichuan New Tech Digital Equipment Co. LSI has partnered with Thakral Corp to produce a complete DVD player manufacturing kit for the Chinese market. The total MPEG-2 decoder market for published media applications reached just over 9 million units in 1998. Shipments for this market will continue to grow reaching the same level as those in the on-line networks segment within the next several years. Table 3 below details shipments from the top manufacturers. Table 3. MPEG-2 Decoder Market Share for Published Media Applications [edit] 1998 %Rev change %Share Rev %Share Units Cube 549.93% 50.98% 50.68% LSI -16.00% 16.47% 16.57% Sigma 438.46% 13.73% 13.81% ESS 77.51% 10.86% 10.93% Lux 51.20% 3.35% 3.37%

To: VidiVici who wrote (43433)	7/29/1999 2:26:00 PM
From: Black-Scholes	Read Replies (1) \| Respond to of 50808

MPEG-2 Decoder Chip Market Share for On-Line Network Applications [edit] 1998: Units Revenue %Share Rev %Share Units STM 12.1mm $203.0mm 71.77% 68.24% LSI 2.1mm $29.6mm 10.48% 11.79% Cube 1.7mm $24.1mm 8.54% 9.61% Phillips 1.3mm $19.0mm 6.72% 7.55% [end edit] The vast majority of MPEG-2 decoders for on-line networks are Main Profile at Main Line (MP@ML) decoders as opposed to Main Profile at High Line (MP@HL) decoders. However, HDTV converter set top boxes require a MP@HL MPEG-2 decoder. ST Microelectronics' latest MPEG-2 decoder, the STi7000, is geared toward the HDTV set-top box market. Philips is also touting the TriMedia processor as an MPEG-2 decoder solution for this market. LG Semicon has developed an MP@HL MPEG-2 decoder in cooperation with Zenith Electronics who is manufacturing HDTV sets and set top boxes. VM Labs and Equator Technologies are also offering media processors as set top box MPEG-2 decoding solutions. The VM Labs NUON chip is part of Motorola's Streamaster set top box architecture. In January 1998, Mitsubishi and Lucent announced a jointly developed DTV chipset that uses an MPEG-2 decoder from Mitsubishi. Matsushita has also developed a single-chip digital TV decoder for internal use. Motorola has partnered with Sarnoff, who was involved in setting the U.S. DTV standards, to develop semiconductors for digital television. Motorola has licensed Sarnoff's research and technology, and Sarnoff will provide design assistance and development support. Several MPEG-2 decoder chips have resulted from the partnership. Motorola's MCF40001 combines an MPEG-2 decoder, AC-3 audio decoder, graphics processor, and transport demultiplexer. The chip is targeting all types of digital video set top boxes. Motorola is also offering the MCT4000, which is a MP@HL MPEG-2 decoder for HDTV processing.