HP will begin selling imaging chips based on technology, once reserved for the company's own scanners and printers, to outside companies for the first time.
The chips are based on CMOS (Complementary Metal Oxide Semiconductor) technology used in the manufacture of most computer chips, an increasingly popular alternative to the pricier Charge Coupled Device (CCD) technology featured in most of today's digital cameras.
A digital camera's CMOS-based sensors do not require separate circuits for analog-to-digital signal conversion, resulting in a lower cost chip that uses less battery power at equivalent picture quality.
Broad application of the technology has the promise to translate into inexpensive consumer digital cameras, but CMOS technology to date has had performance problems in low light conditions compared to CCD technology.
Perhaps one of the key enticements for HP lies in projections for the market's growth. Revenues for products using imaging chips are predicted to grow by 60 percent to $23 billion in 2002, according to research firm Cahners In-Stat.
The new chips are not yet intended for use in high-end "megapixel" cameras which have picture clarity approaching that of film-based systems. HP's chips are better suited for lower resolution products, such as "Webcams," security cameras, low-end digital cameras, and even fingerprint recognition systems, company officials said.
HP isn't the only company eyeing the market for imaging chips.
HP will start volume production of its new family of chips in December, with prices expected to range from $17 to $25 per chip in quantities of 1,000.