Intel To Develop Chips For Digital TVs

Intel plans to develop a chip that could lead to slimmer andcheaper rear-projection TVs. The move would fall in line with the computerindustry's growing attraction to the consumer electronics market, where digitaltelevision sales are soaring and profit margins are still healthy but thinningas competition increases. Intel president and chief operating officer PaulOtelliniare is expected to disclose at next month's CES Show in Las Vegas, isalready creating a stir among industry analysts. With its research anddevelopment heft, analysts say Intel could do for big-screen TVs what it did forpersonal computers: improve quality and substantially lower prices. The entry ofIntel would pose a serious threat to established consumer electronics companiesin Europe and Japan, such as Philips and Sony as well as emerging players likeTexas Instruments Inc.

Intel is exploring a technology called liquid crystal onsilicon. The technology is a hybrid between the more expensive siliconmicrochips and liquid crystal displays. A few companies already have tried tointroduce LCos products, but they haven't made any deep inroads in the market.LCoS technology competes against other new display technologies that havealready invigorated the rear-projection TV market, most notably the digitallight processing (DLP) chip pioneered by Texas Instruments. The DLP chip usesnearly a million microscopic mirrors that tilt and reflect light to create animage. DLP technology has led to models slimmer and lighter than the traditionalbulky big-screen TVs, but remain relatively expensive.

For instance, a Samsung 43-inch DLP high-definition TV is 68pounds, 15.7 inches deep, and has a suggested retail price of $ 3,999. An LCoSchip uses tiny crystals instead of mirrors, an approach that Doherty and otherindustry analysts say is cheaper to make, easier to improve upon, and thus morelikely to deliver better picture quality at lower prices. Even ultra-sleekplasma TVs, which are gaining in popularity, will feel the competitive pinchfrom LCos TVs. LCoS technology could lead to lightweight 50-inch screens for aslow as $ 2,000 by the end of 2004 and half that price a year later.