Paris - As DVD recorders push to hit $200 prices next year, two of that sector's top four chip suppliers are rolling out second-generation ICs this month designed to help achieve that goal.

While a popular 'luxury' consumer item in Japan, the DVD recorder has found less acceptance elsewhere and is made almost exclusively by a handful of consumer electronics companies in Japan and Europe. But, with prices falling, Chinese and Taiwanese manufacturers could take the technology mainstream and help the drive to the $200 threshold by late next year.

That development that would surely encourage low-wage Asian manufacturers to jump on the DVD recorder bandwagon, bringing, in turn, the huge domestic Chinese market into play. Aware of the China factor, both Philips and LSI Logic Corp. are rolling out second-generation chips.

Highly integrated, the single-chip MPEG-2 encode/decode solutions will be priced below $25 in high volume.

Philips hopes to differentiate its MPEG-2 codec from others "by using 0.12-micron technology-by far the most-advanced process technology," said Jeroen Keunen, general manager of consumer and multimedia products. Though the first samples are being made in Crolles, France, where the Dutch giant shares a fab with STMicroelectronics and Motorola, Philips plans high-volume mass production on 12-inch wafers either in Crolles or in a facility of TSMC, a Philips partner .

Philips Semiconductors' DVD recorder chip is tightly coupled with the DVD+RW format developed by its parent company and with its optical engine. The company decided a few years ago to pursue the market for recordable DVD players by solidifying the position of DVD+R/DVD+RW and strictly focusing its software development efforts on the format. Philips thus can offer OEMs a complete software stack-stable, reliable and proven by its lead customer, Philips Consumer Electronics, said Keunen.

LSI Logic offers DVD recorder IC solutions that can be deployed across competing DVD recordable formats, with "more flexibility and independence" in terms of the choice of components for the overall DVD recorder system design, said Jim Fox, director of marketing for DVD products at LSI Logic. The company's DVD recorder chip has been designed in to OEM systems from LG, Zenith, JVC, Samsung, Apex and LiteOn. Many of those OEMs support different DVD recordable formats, deployed with varying feature sets and sold in different geographical markets. In fact, LSI Logic's chip powers low-cost DVD recorders, ranging from $399 to $299, that are already available at retail chains like Wal-Mart and Target.

In-Stat/MDR senior analyst Michelle Abraham predicts the global DVD recorder market-which bought 1.3 million units last year-will jump to 4.4 million units in 2003. That number is projected to grow to 10 million next year and to hit 19 million in 2005. In 2007, In-Stat believes 46 million DVD recorders will be sold. LSI Logic's Fox said that by 2007, shipments of DVD recorders may surpass DVD player shipments.

Despite the recorders' market potential, few semiconductor companies are active in today's DVD recorder market. Besides Philips and LSI Logic, Abraham said, only Matsushita and Cirrus Logic are major suppliers of DVD recorder ICs. STMicroelectronics is notably absent from the list.

A few of the usual suspects-Zoran and ESS, for instance-are also in the DVD recorder market, but they lack their own MPEG-2 encoding technology. Both Zoran and ESS have licensed MPEG-2 encoding from NEC, Abraham said, but they seem not to be as far along in integrating features onto fewer chips to reduce cost.

The gap could widen as LSI Logic, whose MPEG encoding is already in its fifth generation, continues to hone its encoding skills, while Philips beefs up its MPEG-2 codec IC with optimized hardware blocks for running new picture improvement algorithms such as adaptive picture sharpness detection and deblocking artifacts removal.

The increasing number of new features required for DVD recorders also hampers many chip vendors.

In-Stat/MDR's Abraham rattled off a daunting list of features that new DVD recorder chips soon must support: digital video transcoding for transferring DV camcorder content; hard-drive interfaces for combo products; transcoding from high-definition to standard-definition recording or transcoding to WindowsMedia9 or H.264 for maintaining high resolution.

On the software side, she regarded "user-friendly menus and program guides" as musts. "Video editing features for camcorder transfers and home recording," will be demanded, she said. Leading silicon suppliers are working on this for second- and third-tier OEMs, she said.

For now, most chip companies-other than LSI Logic and Philips-are using two-chip-set solutions for DVD recorders, pairing a new encoder IC with an older decoder originally developed for DVD players. A one-chip solution can offer unified memory subsystem architecture, providing "subtle but important differences" in recorder feature sets, said LSI's Fox.

With a single-chip solution and a single DRAM subsystem, a DVD recorder can be combined with a hard drive to enable faster-than-real-time recording, he said, since both decoding and re-encoding functions have access to the same DRAM subsystem. Similarly, Fox said, the single-chip architecture can work well for video editing or creating a JPEG-based slide show, encoding it in MPEG and burning it on a DVD, for example. When a host processor is integrated into a DVD decoder IC and has its own separate DRAM, Fox said, there is no data path between the decoder and encoder.

Because of internal architectural improvements made in its second-generation DVD recorder chip, called PNX720, Philips has reduced the required memory bandwidth for DVD recorder applications from 32 bits to 16. "This allows our customer to use one SDRAM unit at 16 bits wide, instead of two SDRAM units to reach a 32-bit width," Keunen said.

LSI Logic's DVD recorder processor, the DMN-8602, has an integrated NTSC/PAL TV encoder for reduced bill-of-material costs. The part's USB controller allows connectivity with digital still cameras, digital audio players and printers. Its DV codec simplifies the transfer of personal digital content from a camcorder to a DVD over Firewire. LSI Logic's processor can also play back MPEG-4 video.