The $250 million stock deal signals Broadcom's commitment to push consumer acceptance of DVI, originally designed as a display connection standard between a PC and a monitor for sending uncompressed digital signals. Broadcom's goal is to further penetrate the non-PC consumer arena with DVI, applying the interface — already proven in the PC world — to consumer devices including TVs, cable set-top boxes and DVD players. Broadcom also hopes to launch cost-effective, scalable Bluetooth solutions by using Pivotal's expertise in radio-frequency CMOS technology.

The acquisition will help Broadcom, a leading supplier of broadband communication chips, to solve "the final 10-meter" connectivity issue — or, how to bring broadband data to a set-top box, TV or PDA once it has reached the home. "Pivotal's expertise — both in wireless and wired technologies — nicely filled out the holes we had," said Rich Nelson, director of marketing at Broadcom, based here.

Pivotal products

Although declining to detail product plans, K.C. Murphy, president and chief executive officer of Pivotal Technologies, said the company has a fully functional Bluetooth product in development, soon to be introduced

Pivotal also offers intellectual property (IP) on single-link DVI transmitters and receivers, which Murphy said are being used in currently available DVI chips from a number of graphics-chip companies. Pivotal also has IP for dual-link DVI solutions that is also being used by several chip companies, he added.

Founded in 1997, Pivotal currently has 70 employees, including 55 engineers. Pivotal and Broadcom have been collaborating for a while, according to Nelson.

"We could have just licensed Pivotal's IP, but we've found each other to be a very good fit," Nelson said. Besides a similar corporate culture, Nelson cited a sharing of the same design methodologies as an advantage. Both companies implement RF on standard digital CMOS, rather than BiCMOS or gallium arsenide, and both use Taiwan Semiconductor Manufacturing Co.'s 0.18-micron process, he said.

Broadcom is getting ready to launch its first DVI solution combined with High-Bandwidth Digital Content Protection (HDCP) for set-tops. Its foray into the DVI market illustrates growing momentum among Hollywood studios and consumer electronics manufacturers behind HDCP-enabled DVI as a digital interface standard for many consumer devices.

Indeed, Nelson claimed that the film industry is embracing HDCP over DVI as a solution of choice.

HDTV bandwidth

An uncompressed digital high-definition TV stream requires a bandwidth as large as 2.4 Gbits/second, and DVI is the only interface to meet that need. The single-link DVI can handle 4.9 Gbits/s while the double-link version can offer bandwidth of up to 9.9 Gbits/s.

In connecting digital satellite or cable set-top decoders with an HDTV display today, there is no way to effectively interface between the two to send uncompressed digital signals, said Nelson. The most prevalent solution is to resort to an analog interface, first converting the digital signal to analog before feeding it into a TV.

Content at risk

Some satellite digital decoders are using an analog component video to connect a set-top to a TV, but Nelson said this scheme worries the movie industry because the component video interface offers no content protection. Hackers could convert the analog component video signals back into digital for illegal copying.

The IEEE 1394 serial interface could be a solution, but it can only handle compressed HDTV streams, not uncompressed signals. Also, by moving compressed HDTV pictures to an HDTV set, 1394 requires associated graphics such as Electronic Program Guides to be compressed. Graphics quality — the very look and feel of EPG — is compromised.

Some consumer electronics manufacturers also complain that the use of 1394 in connecting a digital set-top to a TV assumes that the TV must bear the burden of carrying the HDTV decoding capabilities, thus driving up the cost of a TV set.

Broadcom's Nelson, however, downplayed any conflict between 1394 and DVI. "IEEE 1394 is a different interface designed for different applications," he said. "It's for a two-way communication link, perfect for connecting a VCR or a camera to a set-top."

In contrast, he said, "DVI is designed for a one-way connection for uncompressed signals. Both interface standards will coexist."

Nelson said that after the acquisition is completed, Pivotal Technologies will continue to operate at its site in Pasadena, managed by Murphy. Broadcom will issue in aggregate approximately 1.94 million shares of its Class B common stock in exchange for all outstanding shares of Pivotal preferred and common stock and upon exercise of outstanding employee stock options and other rights of Pivotal.