And these are the companies that need to look at Chelsea-1. Tiawan................................................
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TAIWAN
Combo cards form small, profitable niche <Picture>
Thanks to advancing chipset technologies, graphics cards are no longer restricted to just processing graphics. Almost all graphics cards support MPEG 1 software. Gradually they will evolve to support MPEG 2. In addition, graphics chips are gaining new functions. For instance, S3's GX2 chipsets can provide a TV output function that enables the display of computer data on a TV.
Despite these developments, most graphics card vendors in Taiwan still focus on simple graphics cards that have volumes to justify manufacturing scales. Data Expert, which ships about 300,000 VGA cards a month, for instance, has no immediate plans to produce graphics and video combo cards. The exception is its videoconferencing kit that uses a combo card with a proprietary camera interface.
Most other companies sell graphics combo cards in smaller volumes than their mainstream cards. Freetek, a sound card manufacturer that sells more than 100,000 sound cards a month, sells 3,000 to 5,000 graphics combo cards a month. Jimmy Hsieh, sales director, said that single-function cards are generally easier to sell than combo cards. "Multimedia computers provide a niche for combo cards, but it is not large. We have to be conservative."
Skywell, which sells about 100,000 VGA cards and 20,000 to 30,000 system boards a month, projected to ship 5,000 to 10,000 graphics combo cards a month in 1998. However, Stella Lee, deputy marketing manager of Prolink, said graphics and video combo cards have been the company's cash cow. "We started selling graphics combo cards with Cirrus' 5446 chipset in 1996. Selling pure graphics cards has become routine. Buyers compare prices and decide which suppliers to buy from. But with combo functions, like TV tuner and FM radio, graphics cards have gained added value. That's why we launched AGP versions of combo cards as soon as we could, though it's premature to predict if AGP combo cards will sell."
Prolink shipped about 80,000 graphics cards a month in the fourth quarter of 1997 and projects the number to rise to 100,000 or more in 1998. The company can produce 200,000 add-on cards a month with ISO-9002 certified manufacturing facilities in Taiwan and China.
Companies contacted
Freetek Technology Corp.
Web: freetek.com.tw
Fax#: 886-2-29101441 Kouwell Electronics Corp.
Web: kouwell.com.tw
Fax#: 886-2-27835500 Prolink Microsystems Corp.
Web: prolink.com.tw
Fax#: 886-2-22181065 Provideo Multimedia Co. Ltd
Web: na
Fax#: 886-2-27790433 Skywell Technology Corp.
Web: skywell.com.tw
Fax#: 886-2-25590349
High prices discourage demand
One video card vendor, Provideo, ships 400 to 500 graphics and video combo cards a month. Simon Chen, manager of the company's overseas department, said users like combo cards that provide multiple functions in a single card, which reduces the pain of installation. However, high prices force many users to buy pure graphics cards.
"Besides, not all users will need all the features your combo cards provide. But prices are falling. For instance, the first version of our combo card was priced at about $150 six months ago. Now it is $100, though this price is still much higher than the $30 or so for a VGA card. Users generally don't go for the combo card even though the $100 price might be cheaper than the sum of individual cards a user has to buy in its place."
"Another downside is that when one function stops working, the whole card has to be sent for repair," warned Hsieh of Freetek. "Upgrading is also a problem. When a newer technology is available for a particular function, users can't upgrade that function independently of the others on the card."
Manufacturing, testing critical issues
Manufacturing and testing are critical issues for the manufacture of combo cards, according to companies.
Kenny Shih, vice president of Skywell, said that besides developing a card without compatibility problems, a manufacturer has to test each specific function carefully, which is time consuming. "Moreover, the modem feature involves PTT certification. And the videoconferencing function has to be tailored to specific countries, such as Japan, the United States or countries in Europe, because it is difficult to develop a universal version."
SKYWELL
Established: 1989
Work force: 50
1997 sales: $30 million (projected)
Lee of Prolink agreed that producing combo cards takes more time than pure graphics cards. "But if buyers like the cards and are willing to pay more, it's worth our while producing them."
Skywell's Shih said that using combo cards can reduce compatibility problems for different multimedia functions in a single card because card makers solve the compatibility problems first. "Card vendors also usually bundle software drivers and installation programs to help users reduce the chore of installation."
Makers careful selecting components
All companies said that developing a combo card is not that difficult since there are many standard chipsets and components available. Some companies prefer to work with only one or a select few chip vendors in order to set up long-term relationships and increase their profile among their vendors. However, some companies prefer to use as many chip sources as possible to provide buyers with a wide product range and prevent chip shortage.
According to the companies contacted, the most difficult part is selecting the right components that will not conflict with one another when put together on the same PCB. Prolink, for instance, uses Cirrus' graphics chipsets as the main source. Lee said it is risky to use chipsets from different chip vendors, which can cause unpredictable compatibility problems. "Cirrus' graphics chipsets have been proven to provide the best compatibility for graphics cards with a TV tuner. When using many chipsets, a vendor has to carefully design and test the compatibility for the combo functions. This wastes engineering and manufacturing resources."
PROLINK
Established: 1989
Work force: 80
1997 sales: $23 million (projected)
In addition to using ATI chipsets, Provideo will be evaluating combo cards based on S3 and Cirrus chipsets in 1998. "S3 provides good graphics performance. However, for combo cards, the combination of performance, quality and compatibility are more important than sheer graphics performance."
PROVIDEO
Established: 1989
Work force: 24
1997 sales: $6.5 million (projected)
Kouwell will try most available chipsets, including those from S3, Trident, 3Dlabs and SGS Thomson, for its future combo cards, said Genius Shen, sales manager. "We also plan to evaluate Cirrus and Intel chipsets. It also depends on how these chipsets can provide combo functions. For instance, S3's new chipsets provide a TV output function. We also need to consider which chipsets work best with TV tuner modules.
We are keen to sell to OEM and ODM buyers who can usually provide large volumes. Because it is not clear what their graphics combo card requirements will be in the future, we want to be able to supply whatever they want and this is why we need to use a range of chipsets."
Popular features integrated in combo cards
Which features should be integrated into a combo card are debatable. Some companies sell combo cards that integrate only a few popular features, and others provide combo solutions that meet all multimedia function requirements of a computer. However, most contacted firms agreed that the TV tuner function has the highest demand. Prolink's Lee said the TV tuner function is a mature technology that causes the least compatibility problems for graphics. "The capture function can often cause compatibility problems. That's why we didn't include the function in our combo cards."
Simon Chen, overseas manager of Provideo, shared the same view. "Many end users are not interested in the video capture function which is still only used by power users."
Genius Shen, sales manager at Kouwell, said most of the firm's combo cards, which provide modem and sound functions, are shipped to power users that need audio and video input. "For instance, some of our customers use the cards to control TV walls or videoconferencing."
AGP cards seen as the new trend
Although PCI-bus cards are still the mainstream for most companies, most said AGP will be the sure trend to follow, at least on the graphics side. Kouwell's Shen said only AGP, that provides the best bandwidth, can process the increasing size of multimedia data with ease.
Lee of Prolink said it is still premature to say how well the AGP model will sell. "We would say plain AGP graphics cards will sell because most users still have a tendency to buy single-function cards that are generally sold at a lower price than combo cards and are easier to upgrade to the latest technology. Whatever the latest functions, a user can buy a card with these features. But we want to be ready for delivery if demand for AGP combo cards rises someday."
Range of combo card configurations available
Most available combo cards have a PCI bus, though Prolink has launched one with an AGP bus. Most of the combo cards have a TV tuner, and some of them come with other multimedia functions, like a built-in modem and sound.
Freetek sells a series of graphics cards, including two combo cards, the GM6411 , and the M711DVG.
FREETEK
Established: 1984
Work force: 20
1997 sales: $10 million (projected)
The GM6411, which uses an OAK 6411 VGA chipset, integrates TV and video capture functions. The M711DVG, a VGA card with a modem and sound function, has been developed to fulfill the requirements of a major ODM customer, according to Hsieh. "We started as a sound chip developer. We have enough R&D capability to help customers develop what they want. Profits on sound cards are slim. We have to diversify to be profitable. Video and other multimedia products are one good way to do this."
The GM6411 is priced at $120 each and the M711DVG at $150 each FOB. Delivery takes two to four weeks after receipt of a letter of credit.
Kouwell sells a combo card, the KW-604 . This PCI-bus card uses the ET6000 chipset and provides 3D graphics, a TV tuner and a video capture function. It comes with 4M Multi-bank DRAM, the card is priced at $110 each. The company plans to launch AGP graphics cards and 1394 cards in 1998.
KOUWELL
Established: 1980
Work force: 80
1997 sales: $8.5 million (projected)
Available from Provideo are two combo cards, the PV-920 and the PV-930 . The PV-920 uses an ATI 264VT2 2D graphics chipset and the PV-930 an ATI 264GT2 3D graphics chipset. Each comes with 2M of EDO DRAM and the PV-930 can have this memory expanded to 4M.
The standard features include a TV tuner, MPEG decoding, motion capture, closed caption, and an optional Teletext module for European customers. Each card is bundled with software drivers for Windows 95, Windows NT and OS/2.
The PV-920 is priced at $100 and the PV-930 at $130 each FOB for orders of 100 pieces, which is the minimum order. Delivery takes one to two weeks after receipt of a letter of credit.
Prolink's product lineup includes two graphics and video combo cards, the PCI-bus PV-CL5465P+ and the AGP-bus PV-CL5465A+ . Each card has a Philips TV tuner onboard. The company sold about 3,000 of the PV-CL5465P+ cards a month in the last quarter of 1997 and projected the number to increase to 10,000 in 1998. It plans to start production of the PV-C5465A+ in March 1998.
The PC-CL5465A+ is priced at $160 and the PV-CL5465P+ at $140 each FOB. Each model can be enhanced with modular cards for FM radio, Madrone's Telephone System (MTS) and Teletext at $15 each FOB.
The company plans to launch a 3D graphics combo card in 1998 that uses a 3Dlabs Permedia chipset and has a TV tuner module, an MTS module and a teletext module. It also plans to use the Intel iG740 chipset to develop 3D AGP graphics cards in 1998.
Skywell sells a combo card, the 7-1!. This long card provides seven functions: 2D and 3D graphics, 3D and Wavetable audio, MPEG 1 and MPEG 2 DVD video decoding, a 33.6Kbps fax modem with DSVD, telephony with speaker and caller ID, and videoconferencing that supports H.324 POTS, H.320 ISDN and H.323 LAN standards. The card is plug and play compatible under Windows 95.
The product is appropriate for home users, according to Shih. "The card meets all the multimedia requirements of a multimedia PC. Intel and Microsoft have been pushing multimedia. This card is the answer."
The card is priced at $200 each FOB for orders of 100 pieces, which is the minimum order. The company plans to shrink the card size into a shorter card in 1998 because customers in Japan are demanding shorter cards, according to Shih. "We are also considering simplifying the integrated features. We may eliminate MPEG 2 DVD video decoding and videoconferencing or make these functions optional. Although DVD will be a hot product, the regional codes and patents for DVD may be an issue in the future."
Combo cards have been finding themselves a niche, though single-function graphics cards continue to be the mainstream. Some vendors stress that combo cards can reduce compatibility and create installation problems for users. But some vendors are concerned about the issue of inflexibility which has an impact on maintenance and upgrades. Buyers can expect AGP models to be a strong alternative to PCI models in the coming year. |
