Intel Chips in Power TVs

Intel could change the way you watch TV. Reports that the company plans to produce chips for digital televisions have led analysts to predict an upheaval in the market. Prices for rear-projection digital televisions could drop sooner than expected, and the market for high-definition television could expand faster than previously thought, analysts say.

The New York Times reported on Wednesday that Intel President and Chief Operating Officer Paul Otellini plans to discuss Intel's work in developing chips for digital televisions using Liquid Crystal On Silicon technology at next month's Consumer Electronics Show. Television designers using the chips would be able to produce low-cost rear-projection televisions at sizes equivalent to flat-panel LCD and plasma digital televisions available today, according to the report.

An Intel spokesperson declined to comment on the report.

Competing Technologies

LCOS display technology competes with the current standard for RPTV chips, Texas Instruments' Digital Light Projector technology. It hasn't been much of a competition until recently, with TI dominating the market, says Richard Doherty, research director at The Envisioneering Group, in Seaford, New York.

DLP chips use several small mirrors that reflect an image upon a display. Light is bounced off mirrors that are controlled by a separate processor and memory chip onto a large display, producing an image.

The mirrors required to produce that image are expensive, and adding additional mirrors to a single chip, as demand for larger screen sizes grows, is also very expensive, Doherty says. But consumers who want a large screen will pay less for an RPTV with DLP technology than they would for a LCD or plasma television of the same size, he says.

LCOS technology is designed to reduce the cost of RPTVs by combining the reflective qualities of liquid crystal with the volume economics of silicon transistors, which are cheaper to produce in large volumes than are mirrors. The transistors assemble the image as directed by a digital signal, and then light passes through the liquid crystals to project the image upon a large screen.

This technique results in chips that are easy to manufacture, as chip companies have been making transistors for decades, Doherty says. LCOS chips are also smaller than DLP chips, allowing television designers to reduce the size of their products to compete with LCD and plasma televisions, he says.

Dramatic Shift Coming?

RPTVs have lagged behind the pace set by LCD and plasma televisions, but Intel's announcement might dramatically change the market, says Ashley Domis, display industry analyst for ARS, in La Jolla, California.

"We've seen what Intel has done with computers and lower-cost chips," she says. If Intel can produce low-cost chips for RPTVs that allow designers to build those televisions less expensively than DLP-based RPTVs at thicknesses equivalent to higher-priced LCD televisions, the market for RPTVs will grow significantly, she says.

PC companies such as Dell and Gateway have raced to deploy LCD televisions because of the high margins of those products, Domis says. Current RPTVs have not been as intriguing to those companies because of their size and relatively lower margins, but that could all change if Intel is able to reduce the manufacturing cost of an RPTV, she says.

Gateway sells a 56-inch RPTV based on TI's DLP chip for $3799 through its Web site. For comparison, a Gateway 46-inch plasma television costs $3499.

Besides the display chips, Intel might also get into the manufacturing of tuner chips, says Jon Peddie, president of Jon Peddie Research in Tiburon, California. The company has spent a great deal of money investing in combining silicon and radio technology under the "Radio Free Intel" project spearheaded by Chief Technology Officer Pat Gelsinger, he says.

The move toward digital television chips also plays into Intel's strategy to develop markets outside of PCs. The company has spent a lot of time talking up the digital home, or how the PC will evolve into an entertainment hub that is wirelessly connected to numerous other Intel-powered devices around the home. Those could include wireless media gateways, handheld devices, and smart displays.

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