While many semiconductor companies continue to sit on the fence or have given up on the U.S. terrestrial DTV market, consumer electronics suppliers are scrambling to meet the Federal Communications Commission's digital tuner mandate, which requires TV makers to equip at least 50 percent of their 36-inch and larger TVs with a terrestrial digital TV tuner/decoder by July 1 (see story, page 18).

Aside from Matsushita, which developed its own digital TV chips for its Panasonic TVs, a few chip makers offer off-the-shelf U.S. digital TV solutions, including ATI, Broadcom, Zoran and Philips Semiconductors. ATI's 2002 acquisition of NxtWave Communications Inc. "propelled ATI to become a leader in the DTV silicon market," said Gittings. NxtWave was a pioneer in designing a VSB/QAM demodulator chip for digital terrestrial and cable receivers, he said.

The X210VC combines ATI's MPEG-decoder chip, called Theater, and Nxt-Wave's VSB/QAM demodulation chip, called Xilleon. The resultant device, priced at $50 each in 10,000-unit quantities, supports high-definition or standard-definition broadcasts, MPEG-2 decoder and format conversion, and such interfaces as DVI/HDMI and IEEE 1394.

As a terrestrial digital TV receiver compliant with the U.S. digital TV standard, the X210VC can reduce the cost for a DTV system from $116-including four chips, memory and tuner-to $71, said Gittings. That bill of materials includes SDRAM, flash memory, digital tuner, pc board and passive components, he said.

ATI expects the X210VC will be hotly pursued once TV manufacturers realize that all their 25-inch to 35-inch sets must contain a terrestrial digital TV tuner by July 2005 under the FCC mandate. "Because of the frenzy of activity to get large sets out with digital terrestrial and cable tuners," many TV makers aren't paying enough attention to the FCC digital tuner mandate on medium-size TVs, which takes effect only a year from now, Gittings said. "They need to move more quickly," he added.

Apart from the FCC mandate, many consumer electronics industry suppliers believe a digital cable plug-and-play agreement reached in late 2002 will have a major impact on DTV sales in the United States. In a country where more than 60 percent of households watch cable-not terrestrial-TV, a digital TV's ability to receive digital cable programs will be a key selling point, suppliers said.

ATI estimates that the cost of making a terrestrial DTV receiver compliant with the digital cable plug-and-play standard will be "about $10," said Gittings. That includes an out-of-band tuner, an interface connector for CableCard and a point-of-deployment (POD) controller.

CableCard, supplied by different cable operators, needs to be inserted into a POD slot so that a receiver can decrypt digital cable programs. All major consumer electronics companies are now planning to build digital cable-compatible DTV sets, Gittings said.