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Intel delays first TV chip

In another setback, the chipmaker says a processor for large-screen projection televisions won't come out this year.

Intel won't be getting into television this year after all.

The Santa Clara, Calif., chipmaker said Monday it will not come out with a chip for making inexpensive large televisions this year and that it will rework the chip that has been in development for a later commercial release.

At the Consumer Electronics Show in January, Intel President Paul Otellini announced that the chip, code-named Cayley, would allow TV makers to come out with large-screen projection televisions that sell for under $1,800 by the end of the year. China's TCL had already committed to coming out with televisions based on Cayley, a liquid crystal on silicon, or LCOS, device.

"This will change large-screen television economics," Otellini said in January.

Intel was vague on why the chip is being reworked and delayed, but the company indicated it wasn't happy with the results of work to date.

"We are not going to bring a product to market this year," said spokeswoman Shannon Love. "We will go down a path that will give us clearer product differentiation and improved picture quality."

The setback is the latest in a series of delays for the company. Last month, such missteps prompted CEO Craig Barrett to issue an e-mail urging employees to do better. Among problems announced in July were delays in the release of 4GHz version of the Pentium 4 and of Alviso, a chipset for Pentium M notebooks. The chipmaker also announced that its flagship desktop processor, the 3.6GHz Pentium 4 560, was in very short supply.

The most recent announcement will probably buoy competitors such as Texas Instruments, which makes a competing chip called Digital Light Processor for companies such as Samsung. Samsung execs, as well as some analysts, have expressed doubts about Intel's plans since the beginning. The basic LCOS device--essentially a mirror that is controlled by semiconductors--has been around for years, but has not been deployed commercially with great success.

"It seems like the technology and business case for LCOS is still not there," said David Steel, vice president of Samsung's digital media business, in May.

Intel has also not had much success in branching out of the PC market. An effort to get Intel chips into cell phones has yet to seriously challenge Texas Instruments.