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NEC gets into cheap chips

NEC announces a new family of 64-bit processors running at speeds to 250 MHz, as competition in the unglamorous embedded chip market heats up.

NEC Electronics (NIPNY) unveiled a new family of 64-bit processors running at speeds to 250 MHz that are intended for use in everything from consumer electronics devices to networking equipment, as competition in the unglamorous market for so-called "embedded" processors heats up.

NEC's introduction of its new VR5400 processor, based on Silicon Graphics' MIPS architecture, comes as a number of companies are increasing their focus on the market for embedded processors. Embedded processors are low-cost chips found in a wide range of devices, excluding the desktop PC.

NEC's strategy revolves around a new chip design in 167-, 200-, and 250-MHz versions that includes technology for improving multimedia performance such as graphics, much in the vein of Intel's MMX technology. Unlike the 32-bit processors used in today's desktop PCs, the VR5400 design handles data in 64-bit chunks, offering potentially better performance.

The chips are backwards compatible with previous designs, NEC says, but will also include built-in technology that will make program development easier for developers wishing to use the chip's new features.

Used in devices such as digital set-top boxes or digital televisions, the new chip could lower overall design costs because it has the ability to incorporate modem and audio playback functions onto the chip, NEC claims. A component of the VR5400 processor has the ability to act as a DSP (digital signal processor), meaning that analog signals can be converted into data that the processor can manipulate in place of a separate chip dedicated to those functions.

NEC says the chip is also suited for use in multifunction peripherals such as all-in-one fax/scanner/printer devices that are becoming increasingly popular, as well as networking equipment that is used for sending data over the Internet to its proper location.

Digital set-top boxes in particular could eventually provide a large sales opportunity for the processor. Cable companies are looking at the need to upgrade some 65 million older cable boxes in order to offer more TV channels and new revenue-generating services. Digital set-top boxes will work much like cable TV boxes, but will offer computer-like capabilities such as Internet access and email.

However, NEC is facing increased competition, even in a rapidly expanding markets. Intel, for one, recently decided to take on embedded processors with the StrongARM chip design it acquired from Digital as a part of a lawsuit settlement between the two companies. The move was striking: To address the market for low-cost, low-power chips, Intel added a processor from outside the its own labs for the first time in its history.

IBM and Motorola, which already have a significant presence in the market for embedded processors, last year upped their efforts to sell embedded chips based on the PowerPC architecture used in the Apple Power Macintosh desktop computers.

NEC says the new chips will be in volume production by the third quarter of 1998. The chips are expected to be priced at $45 for the 167-MHz VR5432 microprocessor, $75 for the 200-MHz VR5464 processor, and $95 for the 250-MHz VR5464 device in 10,000-unit quantities.