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Sunplus-Silicon Image deal to include co-development

Posted: 14 Aug 2003 ?? ?Print Version ?Bookmark and Share

Keywords:sunplus? silicon image? multimedia ic? semiconductor chip?

Taiwan consumer electronics IC designer Sunplus Technology Co. Ltd is forging a closer relationship with U.S.-based Silicon Image, going beyond the usual IP-licensing arrangement to include the co-development of future multimedia ICs and the transition of Silicon Image's current chips into lower-cost versions that can compete in commodity markets.

The partnership has been more than two years in the making and may hint at the future direction of Silicon Valley-Taiwan business relationships. The framework marries a tech-savvy, standards-setting company with a Taiwan-based IC designer used to the dog-eat-dog world of thin-margin volume products, especially those that are sold on to manufacturers in China.

Sunplus recently entered into a relatively similar agreement with Oak Technology, in which Sunplus paid $30 million in cash and stock for Oak's optical storage business. The two companies also agreed to work together on low-cost chips for the imaging and digital TV markets in China and to form a spin-off company, called Sunext Technology, that will focus on optical storage ICs for the PC market.

In general, the IP-licensing portion of the more recent agreement, which was struck earlier this month, is non-exclusive; Silicon Image has also licensed IP to Taiwan-based Novatek and Weltrend. So it is the co-development aspects that make the deal more attractive for both parties.

Silicon Image is bringing its well known multimedia and storage systems IP to the partnership, which is based on three emerging standards: Digital Visual Interface (DVI), High-Definition Multimedia Interface, and Serial ATA.

Sunplus, with the help of Silicon Image engineers, will incorporate this IP into new products that both companies will sell. Sunplus will also develop cheaper versions of Silicon Image's current chips based on DVI cores and spin new versions of the chip ready for ultra-competitive mass markets.

Sunplus' lower overhead should yield cheaper chips that help extend their lifetime in the market. "Traditionally, Silicon Valley companies only enjoy the growth period of the product cycle, but they can't enjoy the volume as much because of greater competition," said Wayne Shen, an executive at Sunplus. "Now, with back-end help, they can get good margins in both."

- Mike Clendenin

EE Times

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