Set-top silicon a wide-open game

Instead, industry observers expect to see companies such as communications expert Broadcom, chip designer MIPS, Japanese conglomerate Hitachi, and graphics chip manufacturer ATI Technologies determining the direction of the market.

The absence of a "Wintel"-like duopoly largely emerges from the technological and economic circumstances of this market. Set-top boxes at this point simply don't appear to need--or they can't afford--the computing power offered by chips based around the Intel architecture.

By contrast, these various other companies offer a "less is more" experience for the set-top arena. Their processors provide the specific computing power that consumers need for Web surfing, e-shopping, video playback, and communicating across the Internet. In addition, many of these companies plan to fuse the communications, graphics, and other functions into the same piece of silicon for a "system-on-a-chip" solution, which will make these less-expensive solutions even cheaper.

"Set-top boxes need a simple processor that does several things very well, and a lot are going to be MIPS based," said Kathleen Maher, an analyst with Jon Peddie Associates, a Tiburon, California-based consultancy. "ATI is turning up in all sorts of set-top boxes. Broadcom is also doing very well."

Cost, in many ways, is key in this market. Set-top boxes may sell for as much as $500--but in reality they will have to sell for closer to $200, said Maher, a price ceiling that puts a lid on silicon costs. Intel's low-end Celeron chips start in the $65 range. Processors based around the MIPS or Hitachi designs, however, might sell in the $20 range, said Allen Leibovitch, program manager at International Data Communications.

Integration and bundling will also work in favor of some of these companies. Broadcom, he points out, "has a great graphics processor. They have a microprocessor through MIPS. They have MPEG decoders. They also have a cable modem."

The company essentially serves as a one-stop silicon shop for set-top makers. "They are also working toward a system-on-a-chip," Leibovitch added.

Chips based around the MIPS design seem to be the ones most frequently popping up in set-top boxes, but they are by no means alone. Hitachi should also be a strong contender in this market with its SH-3 and SH-4 processors, said Leibovitch. Additionally, "Intel has a pretty good shot," with StrongARM, he added.

Although less expensive than PC processors, the MIPS, ARM, and Hitachi chips tend to pack a punch. MIPS processors are essentially configured around the design used for SGI workstations' chips a few years ago. They don't cost much because the embedded versions of these chips do not contain all of the functions of its predecessors. Like ARM, MIPS does not make chips itself, but licenses the design to companies that do.

Maher, meanwhile, adds that ATI will likely be a common name in the business because of its graphics part. The company's graphics chips are being incorporated into boxes from General Instrument, among other manufacturers. The company is also shopping around its own set-top box design prototype, which uses a MIPS processor.

PC powerhouses still in the hunt
Still, Intel and other "X86" chip vendors are not giving up on their core architectures. Executives from Intel, AMD, and National Semiconductor have all stated that their respective companies are searching out set-top opportunities. Both Intel and National have also stated separately that they have landed to-be-announced design wins for set-top boxes.

The argument for the traditional PC architecture comes from the need for compatibility. These chips are optimized for Windows-based content, and Windows-based content is increasing on the Web daily. As consumers begin to demand more performance from their set-top boxes, set-top box makers will likely turn to these classic designs.

"The X86 core is the best solution for applications and plug-ins for the Net," said Steve Tobak, vice president of marketing at National. "Consumers will want a Web browsing experience that is comparable to what they get on a PC."

National recently announced it was selling off its PC microprocessor division. However, the company is keeping the intellectual property and design teams for its MediaGX line of integrated processors, which combine a standard PC processor core with graphics, audio, and other functions.

Intel hedges its bets
Intel is pushing both StrongARM and Celeron for the set-top space. Interestingly, most of the design wins have so far been with Celeron, said Paul Otellini, general manager of the Intel Architecture Business Group told an audience at the company's recent analyst meeting. Intel-based set-top boxes may emerge by the third quarter of this year, other sources said.

"We have a separate standalone group focused on these devices," Otellini said. He emphasized that Intel is not tying its opportunities to Microsoft. The set-top group is working with the Redmond giant, but also with Be Incorporated, Linux developers, and Wind River Systems.

Whether or not these predictions come true is an open question. Set-top boxes are becoming more complex, stated Maher.

"We want an Internet set-top box, a DVD player, digital VCRs, Internet gaming, blahdee, blahdee, blah," she said. General Instrument will soon come out with the DCT 5000, an Internet set-top box with an optional hard drive. In other words, the future of the technology has yet to be written.

Leibovitch, however, points out that the complexity that might require PC compatibility has yet to emerge. Price, therefore, will remain the determining factor.

"[The Celeron] is still an expensive solution. It can't be integrated that well," he said. "The MediaGX is more of a maybe."