Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Genesis Microchip (GNSS) -- Ignore unavailable to you. Want to Upgrade?

To: gerard mangiardi who wrote (491)	11/10/1999 7:53:00 AM
From: orkrious	Read Replies (2) \| Respond to of 1277

Can someone comment on this Forbes article on Pixelworks. The CC notes Greg Jung posted Message 11707218 show GNSS thinks of them as a picture-in-picture chip company. Are they ahead of GNSS? forbes.com Allen Alley is a venture capitalist trapped in an entrepreneur's body. Four years ago when he funded In-Focus Systems (nasdaq: INFS), a Wilsonville, Ore.-based maker of projectors, Alley thought the concept was so good that he ended up working for the company. Today, In-Focus has $350 million in annual sales, and Alley is onto his next startup, Tualatir, Ore.-based chipmaker, Pixelworks. The company, started by Alley and six others, has developed an image processor, that helps flat-panel displays perform better than their cathode ray tube (CRT) counterparts. "We believe that flat panel display will replace the CRT displays," says Alley. But a lot has to happen first. One of the biggest problems with the flat-panel monitors is that they are designed for use at a particular resolution (1024 x 768) and do not work very well at other resolutions. In other words they do not scale. -------------------------------------------------------------------------------- On a CRT monitor an image can be scaled infinitely in either direction, but in flat panel displays it is still a problem. -------------------------------------------------------------------------------- Pixelworks has impressed David Mentley, who follows the business for Stanford Resources, a San Jose, Calif.-based research firm tracking the LCD market. "LCD flat-panel monitors are the wave of the future, and in the next few years you can expect to see monitor technology improve in leaps and bounds." Alley claims that his company will be a leader because of its radical new chip. "As the plain old CRT monitors are being replaced with flat panel displays, chips like the Image Processor are becoming increasingly important," says Mentley. On a CRT monitor an image can be scaled infinitely in either direction, but in flat panel displays it is still a problem. However, the Image Processor from Pixelworks fixes that. A highly integrated chip, Image Processor has an Intel 80186 microprocessor, and 4 megabytes of DRAM. "In terms of complexity, this system-on-a-chip solution does the work of about 10 to 20 discreet chips," at a cost of about $800 per panel, Alley says. "We take that cost down to $100." Customers back Alley's words. Viewsonic--currently the largest flat panel display seller with more than 15% of the market, and Compaq Computer (nyse: CPQ) are two major customers. But it is Walnut, Calif.-based Viewsonic--the largest computer peripherals company in the U.S.--that is a Pixelworks fan. The 12-year-old, $1 billion a year, privately held Viewsonic has based its next generation OptiSync technology on the Pixelworks chips. One of the most interesting uses of Pixelworks is a new Viewsonic monitor that allows consumers to hook up a computer, VCR, video camera and several other peripherals into the monitor. The $4,000 18-inch flat panel display has an image quality that the company claims is unmatched in the market. Such an enthusiastic backer would come in handy for Alley. Sales of flat panel displays are likely to jump from 1.45 million units in 1998 to 24.5 million units in 2004, according to Stanford Resources forecasts. But flat panel displays are not the only market that can use this superchip. Other products like projectors and plasma television could use a graphics boost. Plasma televisions, the types currently being touted by Philips Electronics as "thin TV" will see a surge in sales from 15,000 units in 1998 to a shade less than 1 million units by 2004, Stanford Resources predicts. The sales of projectors will increase to 2.16 million in 2002, up from mere 579,000 last year. With the market demand exploding, Pixelworks will see its sales jump from virtually nothing to about $10 million in 1999. -------------------------------------------------------------------------------- Sales of flat panel displays are likely to jump from 1.45 million units in 1998 to 24.5 million units in 2004. -------------------------------------------------------------------------------- Apart from Compaq and Viewsonic, Pixelworks executives boast that eight of the top ten consumer television makers are among the company's customers. At present about 15 devices that use Pixelworks are available in the market, and three times as many are under development. Three venture capitalists--Battery Ventures, Sequoia Capital and Charter Investors--like the story and have pumped in just more than $21 million in three rounds. "When Allen came to us, we did not even have to think twice," says Oliver Crume, general partner with Boston-based Battery Ventures. The closest competitor is Genesis MicroChip (nasdaq: GNSS). But when asked about Genesis, Alley says: "Nobody has done the level of integration we have done. On a board-to-board basis we are an eighth of the cost." Stanford Resources' Mentley is more cautious. He puts both Genesis and Pixelworks right next to each other. But given Alley's track record, Mentley won't bet against Pixelworks.