New leader in DVD recorder chips

Chip maker LSI Logic withdrew from the DVD-player chip market several years ago amid falling prices and brutal competition from the likes of ESS Technology, MediaTek and Zoran. But as demand shifts to next-generation DVD machines that record as well as play discs, LSI has gotten back into the game, establishing a leading position in one of the chip industry's fastest-growing markets (see chart "DVD Recorders Catching On," below).

LSI captured 40 percent of the worldwide market for DVD recorder controller chips in 2004 and expects to add to that lead this year, according to Adrienne Downey, senior analyst with Semico Research. "LSI's been really aggressive in going out there and getting design wins," she says. Customers using LSI's recorder chips include GoVideo, JVC, LG Electronics, Lite-On, Samsung, Toshiba and Zenith. Even Philips Electronics, whose chip division makes its own recorder chips, uses some LSI chips.

Semico estimates that LSI's nearest competitor, with 32 percent of the 2004 market, is Matsushita Electric, which supplies chips only to its own Panasonic and National brand products. The next-closest competitors, Cirrus Logic, Philips and Zoran, each had less than a 10 percent market share. And in June Cirrus sold its money-losing DVD-chip business to newly formed Magnum Semiconductor.

Market research firm iSuppli expects sales of DVD-recorder controller chips to rise from $620 million this year to more than $1.6 billion in 2009. Moreover, iSuppli forecasts that the total semiconductor content in DVD recorders—including memory, analog and other components—will nearly triple, from $1.5 billion in 2005 to more than $4 billion in 2009. During that same period, revenues from DVD player-only chips is forecast to decline 27 percent, from $1.8 billion to $1.3 billion.

Although DVD recorders were introduced several years ago, they caught on slowly, because early models cost more than $500 and buyers were confused by an array of rival recording formats. But sales are picking up as name-brand prices fall below $200 and discount brands creep below $100. Semiconductor analyst Rick Faust, with investment bank C.E. Unterberg, Towbin, expects DVD-recorder sales to soar when prices of well-known brands reach $99. When that happens, he says, "we're going to see DVD recorders basically cannibalize sales of the players."

Another potential sales stimulus is the introduction of machines that can use any of the various DVD recording formats—DVD+R, DVD+RW, DVD-R, DVD-RW, and DVD-RAM. Most current DVD recorders handle only one or two formats. But both Panasonic and LG have introduced multiformat recorders that work with all the standards, and Jim Fox, director of LSI's DVD product marketing, expects such systems to take over the market. "The trend for most major manufacturers is to work with all the formats and to remove this as an issue for the consumer," he says.

Fox says DVD-recorder chips are challenging to design, requiring mastery of multiple technologies and TV broadcast standards. Whereas players need just a read-only optical drive and an MPEG decoder chip to play back digital content, recorders also need MPEG encoding chips to record, several varieties of tuners to receive different worldwide TV signals, analog interfaces to import data from camcorders, and more-sophisticated controllers for optical drives that must both read and write DVD discs.

"Success in the player market by no means assures success in the recorder market," says Fox. Yet the opportunity also is greater, he notes, because the chips used in DVD recorders currently sell for four to five times as much as those in DVD players. "There's far more silicon content for a company to capture in a DVD recorder than in a DVD player," he says.

One potential damper for DVD-recorder sales is the expected introduction late this year of high-definition DVD players capable of storing six times as much data as conventional DVDs. "They'll be competing for share of mind and share of money," contends Ken Lowe, strategic marketing vice president for Sigma Designs, a maker of high-definition chips. Yet iSuppli analyst Chris Crotty cautions that initial high prices and the battle between Sony's Blu-ray and Toshiba's rival high-definition DVD formats will slow the early adoption of high-definition DVDs.

Sigma Designs, Zoran and others already have introduced chips for high-definition DVD systems, before either of the standards is complete, hoping to get a leg up in the next emerging market segment. Others, including Broadcom, are also expected to enter the market.

But LSI, having reestablished itself as a leader in DVD chips, plans to be there as well. Says LSI's Fox, "We'll try to be the company that's ready when the critical product cycle comes."

Source here

LSI Logic talks consumer electronics, highlights DVD-recorder chip; but aren't PVRs more significant?

A few weeks back, LSI Logic held a consumer-electronic-centric press event to outline its strategy in that space. The company invited partners to demonstrate some innovative new products based on LSI Logic silicon. The highlight of the program was the latest member of the DoMiNo product family, the DMN-8653, a video decoder SOC introduced on July 4. The company also discussed its position in the professional broadcast market, in flat-panel displays, and in DSP-centric applications such as handsets.

The DMN-8653, the third generation of the DoMiNo family, primarily targets DVD Recorders but can also be used in PVRs and digital set-top boxes. The latest offering supports all of the current recordable and rewritable optical disk types, including DVD±R/RW. Unlike the prior-generation chip, the DMN-8653 can also support a hard drive for the PVR function, and can simultaneously encode two incoming SD video streams using MPEG-1, MPEG-2, MPEG-4, or DivX codecs. Moreover, the chip is flexible and will let consumer-electronics vendors use the same SOC in low- and high-end products. For example, a designer would pair the chip with a two-chip, 32-bit memory array to enable dual-channel operation, while a single-chip 16-bit device would suffice in entry-level DVD recorders. In high volume, the device will cost $25. LSI Logic also showed photos of the evolution of DVD recorders. The electronics have been reduced to the degree that the disk drives and power supply dictate product size because the electronics are amazingly simple.

While I think the company has been very innovative with its digital-video family, I still left the presentation thinking that it doesn't necessarily have a proper view of the market. The DMN-8653 presentation attempted to make two major points. First, LSI argued that the DVD Recorder is a much different and more complex device than a DVD player. The company is spot on with that thought, but I don’t know who might argue with it. A DVD recorder requires encoding, one or more tuners, and other functions that aren’t needed in a DVD player.

The second main theme focused on the DVD recorder as the hub of the digital living room. LSI Logic presented the DVD recorder as if it were the device that all consumers would buy, and indicated that it might or might not also include PVR capabilities. The company presented numbers from In-Stat that projected how many DVD recorders will include PVR capability by 2008. According to the In-Stat and LSI numbers, by 2008, 35% of DVD recorders will also sport hard drives and PVR capabilities in North America. The projections around the world include 50% in Europe and 90% in Japan. LSI Logic also argued that the DVD recorder would become the set-top box of choice once cable MSOs begin to supply digital decoders in the form of modular CableCARDs.

I couldn’t disagree more with LSI’s market assessment. A hard-drive-based product will anchor the living room, and an optical drive will be the option. Frankly, optical burners of all types are inherently short-lived, in my experience. While my first TiVO has been happily humming along for five years or so, I’ve been through close to a dozen recordable/rewritable optical drives in the same time period. Moreover, today there are more PVRs in the market than DVD recorders. The look at the market should be based on the PVR.

I do understand the situation that LSI Logic finds itself in. Unless a company with a technology such as DoMiNo can make a deal with DirecTV, Dish Network, Scientific Atlanta, or Motorola, it will be left out of the digital set-top-box market in North America. Moreover, most PVRs will flow through those same channels. It will be interesting to see if CableCARD really happens and changes the dynamics and how IP-based set-top-box technology will affect the market—but those are topics for another post.

The rest of the presentations did yield some interesting tidbits. Because LSI also supplies chips into the professional encoding market, the company has some insight into codec futures. Bob Saffari, senior director of marketing and business development for professional/broadcast, speculated that H.264 (MPEG-4) would win 80% of the market over Microsoft’s VC-1 for HD encoding. Today, an H.264 HD encoder requires 20 to 30 chips, depending on implementation. Saffari wouldn’t speculate on a roadmap to a more highly integrated H.264 HD encoder. But in the past, LSI Logic has cut the number of chips required to implement earlier codecs in half or better every two to three years. Saffari did project that by 2010, we’ll see HD programs carried in 5- to 7-Mbps H.264 streams, whereas today HD requires 15- to 20-Mbps MPEG-2 streams. So there is clearly lots of silicon work left to support ubiquitous HD.

Neither Saffari nor Jim Fox, director of marketing for DVD products, would pick a winner among the HD DVD and BluRay factions trying to establish a high-definition DVD standard. The company is resigned to supporting both. The cost in the electronics will not be that great, but the cost of optical pickups and other electromechanical components will impact consumer prices if support for both flavors must be present.

LSI Logic is relatively new to the flat-panel market. But Kenroy Francis, director of marketing for digital TV products, claims the company can win share through its ability to support media processing and display processing. Media processing includes tasks such as MPEG decoding that LSI has long experience with. The company announced its ClearView display processing—scaling, de-interlacing, image enhancing—capability back at CES early this year.

Finally, I was surprised to learn just how many ways LSI offers its ZSP-branded DSP technology. As in other technology areas, the company has some standard ZSP-based products, and it’s available in structured and cell-based ASICs. But LSI also licenses the ZSP core and sells ZSP wafers for use in system-in-package designs. The top of the line core is the 400-MHz, quad-MAC ZSP-600. The company has sold ZSP into a variety of markets including communications and multimedia. Tuan Dao, VP and general manager of the DSP products division, claims major 2G and 3G handset design wins in Asia and other regions outside of North America.

Source here

Panasonic DMR-BW900 Blu-ray Recorder Writes to 50GB Dual Layer Discs or a TB of HDD

Recording 18 hours of 1080p on a single disc is pretty serious stuff, and Panasonic Blu-ray recorders launched at CEATEC Japan do this. They do this via a digital TV tuner, MPEG 4 compression and support for 50GB dual layer discs you'd see on a PC recorder, but never before on a home theater box. The players also have HDDs in them, up to $2600 for a 1TB model (there are five other lesser models, too, and the phrase product spam comes to mind). The terabyte drive can do 381 hours of recording, but using that lowest setting for 1080p seems perverse and wrong. Transferring from HDD to disc can be done at 4x. Japan only, for now, and given the high-endness of this setup and American HDMI DRM, maybe forever. [PC World]

Source here