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Integrated IBM chip may lower set-top costs

This summer, Big Blue is coming out with a chip that integrates functions such as video decoding, which ordinarily might come on their own silicon.

    IBM is expanding its commitment to the idea of "pervasive computing" with an integrated processor for set-top boxes that could lower the cost of rolling out interactive services.

    IBM Microelectronics is coming out with a new chip this summer that integrates a microprocessor with functions such as video decoding that ordinarily might come on their own silicon.

    The chip combines an embedded PowerPC processor with an MPEG processor for decompressing audio and video signals and on-board memory. IBM will also wire it to communicate with a number of input standards, including smart cards.

    As a result, the cost of making digital cable or satellite set-top boxes--and the risk involved in banking on services to be carried on these boxes--drops.

    "This fits into our overall push of pervasive computing, from offering content production, to storage, down to distribution points [such as set-top boxes," said Nick Chakalos, marketing manager with IBM Microelectronics. "This chip squarely falls in that area."

    The set-top market will increase significantly in volume in the next three years, if only modestly in terms of revenue. IBM cites Dataquest research that predicts the market for semiconductor chips in digital set-top-boxes is currently $2 billion and will grow to nearly $3 billion by 2002.

    One of the drivers of the U.S. market is cable, as carriers are anxious to offer fancy capabilities and services. Direct broadcast satellite (DBS) operators, too, are getting ready to jump in the market for interactive video and data services.

    These devices will be an attractive alternative to PCs for Internet access in countries where PCs have yet to take hold because of cost or infrastructure market barriers, according to a new report from Hambrecht & Quist. "Deployments of Internet appliances in international markets will be 6 to 12 months ahead of U.S. deployments," the report said.

    "IBM's offering will allow us to quickly deploy a digital interactive cable system to millions of subscribers," said Mr. Cheng Shi Ping, the CEO and chairman of Sichuan NewTech Digital Equipment, in a statement. NewTech is headquartered in Sichuan, China.

    Momentum abroad could translate into more competition for companies like VLSI, LSI Logic, and STMicroelectronics.

    In the United States, the company's chips may find their way into satellite set-tops from Echostar, which is due to release advanced set-tops in the fall of 1999 using the OpenTV operating system, which has been ported to the PowerPC chip platform.

    IBM said the digital set-top box integrated controllers are sampling now, with production volume planned in July 1999. Pricing was not announced.