Consumers in the market for big screen TVs may be seeing prices even lower than originally expected in 2004.

That's because semiconductor behemoth Intel is expected to enter the projection television chip market in 2004 with liquid crystal on silicon (LCOS), potentially cutting into Texas Instrument's (TI) stronghold on the projection TV market with its digital light projection (DLP) chip.

Intel is expected to announce the LCOS chip and its plans to enter the market during the Consumer Electronics Show in Las Vegas in early January, according to Richard Doherty, research director of technology market research firm Envisioneering Group.

An Intel spokesman said the company is not commenting currently on anything it is doing "in that space."

"TI makes a lot of money on DLP chips, the most expensive parts in the $3,000 to $5,000 projection televisions that you see out there this Christmas," said Doherty. "We believe Intel's chip will offer lower costs and a higher image quality than TI."

The move will shake up the projection television and big screen television market, and it will open up a new market for Intel.

"Intel has been dabbling in optoelectronics," said Doherty. "Their CTO Patrick Gelsinger has teasingly talked about how robust their optoelectronics are.  But this projection chip will be their first manufacturing commitment beyond what the lab can demonstrate."

And while these chips will have a profound effect on the projection TV market, they are not cutting edge in terms of manufacturing requirements, said Doherty, so "an existing fab might be kept busy making these chips because they do not require the same expenditure to transition to 90 nm."

Intel's new chips will compete with DLP chips, an area where TI has a stronghold on the market with some competition from Hitachi, Philips and Sony. The TI chip uses 1 million mirrors on its surface, said Doherty. The Intel chip is different technology, using liquid crystal and then lenses and mirrors to magnify the images to a 40 to 60 inch screen. The chip is far denser than an LCD chip.

LCOS is not a new technology, said Doherty. It initially made its foray into the labs about 10 years ago, and some other companies, including Philips, have dabbled in commercializing it. Since its introduction, some of the original patents have expired.

"It's both good and bad news for Philips," Doherty said. "It endorses what Philips has been doing, but it's hard for them to compete with Intel."

Intel's move also means that the handful of Silicon Valley start-ups working on LCOS will have an easier time winning funding, according to Doherty.

And for consumers, it will mean lower prices for projection TVs a year from now. Televisions that are now selling for about $3,000 had been expected to drop to $2,500 for the holiday season 2004. Now those same projection televisions are more likely to sell for $2,000 next year – a price drop of a third, Doherty said.

By: DocMemory
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