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To: Don Green who wrote (36041)	12/28/1999 3:04:00 PM
From: Don Green	Respond to of 93625

O.T.??? Software forces PC audio chip makers to face the music By Mark Hachman EE Times (12/28/99, 02:38:10 PM EDT) SAN JOSE -- Facing declining margins in the commodity PC space, traditional audio-chip vendors are looking elsewhere for profits. The trend is becoming apparent at several leading audio-chip manufacturers and is driven primarily by the increasing use of software-based audio technology as a means to reduce the costs of PC platforms. For example, while it will maintain a presence in the PC-audio market, Yamaha Systems Technology Inc., of San Jose, recently cancelled its YMF744 digital PC-audio controller and two related add-on cards. Philips Semiconductors, the Dutch-based chip maker, similarly indicated that it is planning an audio strategy shift in February, according to a company spokesman, while audio-chip house ESS Technology Inc. has licensed a 32-bit MIPS core as part of its diversification effort. A Yamaha spokeswoman confirmed the cancellation of the YMF744 controller and related XG Quad and XG Movie 5.1 sound cards, but declined to explain the decision. However, a source at the company said Yamaha is devoting more resources to software-generated PC audio than to chip development. ?The PC industry is becoming crowded, and there's not much margin in there,? said a source at the company, who recalled the good old days when an audio vendor could turn a sizable profit on a $20 chip. ?After the Camino chip set started shipping, the opportunities became limited.? Indeed, the introduction of Intel Corp.'s 820, or Camino, chip set in November may have signaled a turning point for the audio hardware industry by including Intel's Audio Codec '97 (AC'97) specification, which allows PC-audio software to be processed via an Intel chip set and associated analog codec. Although the specification was first included in the Intel 810, or Whitney, chip set, the mainstream Camino device established the AC'97 and subsequent Digital Controller '98 specifications as the de facto standards in PC audio, according to observers. Faced with that market reality, PC-audio houses have already begun to adapt their strategies. Compaq Computer Corp. and Micron Electronics Inc., for example, both are using Yamaha's RS-YXG50, a 128-voice software synthesizer application that includes Yamaha's XG digital sound modeling software. And while Yamaha also makes the software's associated analog codec, it expects to put more resources into A/V silicon for the PC and Melody IC, a chip capable of four-voice polyphony in conjunction with secure music transmission over wireless-telephone handsets, a source close to the company said. Likewise, Philips is looking to capitalize on its consumer-market expertise to refocus the Thunderbird line of PC-audio accelerators developed by VLSI Technology Inc., which Philips acquired earlier this year. A spokesman at Philips in Sunnyvale, Calif., said a strategy shift should be announced sometime in February. ?Customers looked at our [PC] chip and said, 'This is really neat,'? the spokesman said. ?But they never ended up buying it.? In a similar fashion, Fremont, Calif.-based ESS Technology has licensed the MIP32-4KC synthesizable processor core from MIPS Technologies Inc. in Sunnyvale. The company will integrate the core into high-performance system-on-chip solutions for the digital consumer-appliance market. ?ESS Technology's roadmap of silicon solutions for the Internet, e-commerce, digital video, education, entertainment, and other related applications require high performance and high integration,? said company chairman Fred Chan. ?The power of MIPS architecture and the flexibility of MIPS Technologies' IP-business model allows ESS to develop system-on-a-chip ICs that will power the next generation of consumer entertainment appliances. semibiznews.com