SUNNYVALE, Calif. — A small Silicon Valley company has developed what appears to be the industry's first single-chip codec for a digital video format that is taking on ever more importance, especially in markets outside the United States. Divio Inc., formerly known as Next Wave Technology, is aiming its NW701 chip — designed for the so-called DV format — at PCs, PC add-in cards for video editing and the potentially huge market for DV camcorders.

Largely driven by Japanese consumer giants such as Matsushita, Sony and JVC, DV is a compression format based on discrete cosine transform (DCT) technology and originally designed for digital tape recording for camcorders and VTRs. Its specification is now standardized as IEC-16884.

While MPEG-2 has swept into the market as a distribution format for satellite, cable, terrestrial broadcasting and DVD, DV has been quietly establishing itself as the video industry's de facto acquisition format for consumer digital camcorders, as well as professional digital cameras and post-production editing systems.

Curiously, however, despite a huge and growing DV-based digital camcorder market worldwide, no U.S. chip vendor — except Divio — has jumped into the DV compression and decompression IC market. To date, the DV codec market belongs completely to Matsushita and Sony, which have independently designed solutions in the form of tightly packed pc-board modules featuring chip sets with sometimes as many as seven ICs.

Those making DV camcorders in Japan are either sourcing the DV codec modules from Matsushita or Sony, or are forced to start in-house ASIC development. No other off-the-shelf DV codec solutions exist for OEMs, Divio executives said last week.

"Our single-chip DV codec will create a new paradigm, in which vendors outside Japan can now effectively enter the DV camcorder or DV-based add-in-card business," said Isaac van Kempen, vice president of marketing at Divio (Sunnyvale, Calif.).

Privately held Divio hopes to get a head start on a market that's could prove lucrative yet is largely ignored by leading MPEG chip vendors like C-Cube Microsystems and LSI Logic. Divio estimates that by the end of this year, close to 3 million DV camcorders will have shipped worldwide since 1996. "In Japan, DV camcorders are outselling analog camcorders for the first time," van Kempen said.

Today, the DV camcorder remains a regional product. "This could be one of those products that aren't big here but are taking off significantly outside the United States," said van Kempen, comparing the situation to that of Video CD. "While nobody in the United States, except for C-Cube, was paying attention, the Video CD market has grown to as big as 18 million units this year in China."

Founded in 1995 as a JPEG compression-chip company, Divio has designed its hardwired DV solution, the NW701DV, to be capable of real-time DV encode and decode. Fully compliant with the DV-SD (standard-definition) "Blue Book," which documents the spec, the chip records data at a constant bit rate of 3.6 Mbytes (28.8 Mbits) per second.

Compared with MPEG-2, which needs only 2 to 18 Mbits/s to record and compress a file, DV takes a much higher bandwidth for compression, resulting in less efficiency in storage space and file transfer. But the NW701 supports lower-data-rate recording, including 3, 2.4, 1.8, 1.5 and 1 Mbyte/s. The lower data rates allow for recording to standard computer peripherals such as slower IDE hard drives, and also makes for faster preview during editing sessions.

The DV codec comes with full-featured audio support. It samples audio signals at 48, 44.1 or 32 kHz, and provides 16-bit or 12-bit quantization.

The NW701 integrates a seven-tap video filter, which is used when down-sampling source video from 4:2:2 to 4:1:1 or 4:2:0, to maintain the overall quality of the incoming video source. Divio has priced the codec at $100 in lots of 1,000, and is offering samples now.

Divio is also introducing a DV manufacturing kit that includes complete software support and reference-card designs. The reference design features an analog NTSC/PAL video input, while a digital input via the IEEE 1394 serial interface is available as an optional module. Along with the codec, the reference-design board is equipped with Philips Semiconductors' PCI bridge chip, video encoder and decoder chips, as well as an audio codec and 256k x 32 EDO DRAM. A PC add-in card based on such a hardware DV codec is expected to cost $800 to $1,000, van Kempen projected.

Divio will initially go after the PC-based video-editing market with its new codec. The next big thing for PC OEMs, after getting their systems DVD ready, is to offer "video capture, editing and video distribution" capabilities, said van Kempen.

Leveraging a host CPU's processing power, a software-based DV codec solution also exists for desktop video editing. But "it's not a real-time solution," said Devang Patel, senior marketing manager at Divio. Meanwhile, Divio's hardware solution "is capable of real-time compression, presents no performance degradation and offers lower-bit-rate options," Patel said.

Next on the agenda, Divio plans to spin a next-generation chip in 1999, with a goal to attack the higher-end post-production market. The second-generation codec will support DV variants like DVCPRO50, developed by Matsushita, and JVC's Digital S, both designed for professional video applications, according to van Kempen.

It remains unclear, however, whether DV or MPEG-2 will ultimately win out on the PC-based editing market.

Because of DV's much milder compression requirement as well as the fact that compression is I-frame based, proponents claim it makes a much easier, frame-accurate editing system. Further, they argue, while there are no MPEG-2 based video cameras out there to provide an MPEG-2 source for editing, there is already a huge installed base of DV camcorders.

MPEG-2 promoters believe the efficiency in storage space and file transfer make an MPEG-2 codec a better solution for PC-based editing platforms. An MPEG-2 compressed file can be directly used for distribution, and there is a huge installed base of MPEG-2 decode and playback systems on the market.

But even a big MPEG-2 promoter like C-Cube acknowledges that DV is not a format that is going away. "We believe that both DV and MPEG-2 need to coexist," said Joe Sutherland, product marketing manager of C-Cube's PC codec division.

One thing for sure, though, is that DV or MPEG-2 editing solutions are quickly replacing JPEG. The demand for JPEG-based non-linear editing system is declining, mainly because the standard is incompatible with the MPEG-2 distribution format and the DV-based video-acquisition format. Many industry observers now believe JPEG editing systems add another, unwanted layer of complexity to the video production chain.

Another factor that makes Divio executives believe DV might be a better fit for the PC platform is copyright issues. While Hollywood studios, eager to protect their copyrighted content, have put a damper on the DVD and IEEE 1394 implementations for PCs, DV has not been touched by the issue — largely because no Hollywood movies are distributed in the DV format. It's generally assumed that the copyright of DV-based content belongs to the individual who originally shot it with a DV camera and edited it on a DV editing system.

The DV format, documented in the Blue Book, can be built by anyone, without paying a special licensing fee. "There is no Content Scrambling System or MPEG LA [licensing authority] to worry about," said van Kempen. CSS is a copy-protection method required for DVD, while MPEG LA serves as a one-stop clearinghouse that collects licensing fees for MPEG-2 video patents.