SGS-THOMSON Microelectronics named number one MPEG decoder supplier by Dataquest

44.3% share in MPEG decoder ICs overall

71.4% share in emerging MPEG-2 decoder ICs

Saint Genis Pouilly, France - September 30, 1996
Dataquest has confirmed SGS-THOMSON Microelectronics as the world's leading supplier of MPEG decoder ICs in 1995. In a report titled "Competitive Trends: 1995 Consumer Electronics Semiconductor Market", Dataquest estimates that SGS-THOMSON had a 44.3% share of the market for all MPEG decoders used in consumer electronics products, such as digital set-top boxes and the forthcoming DVD systems.

The world market for MPEG decoder ICs was valued at $271 million in 1995 and is forecasted to grow significantly with the launch of DVD and the introduction of digital TV systems outside the US, in Europe, Asia, Latin America and Japan. An earlier study by Dataquest titled "DVD: The Hot New Digital Video Destination for Semiconductors" predicted annual shipments of DVD players and DVD-ROM drives for PCs will exceed 33 million units in the year 2000. It estimates the market for semiconductors in DVD equipment will exceed $3.6 billion at the turn of the century.

"The leadership position we hold is a reflection of our vast experience in this technology, early entry into the market and our ability to deliver the highest quality product at competitive prices," commented Aldo Romano, Corporate Vice President and General Manager of SGS-THOMSON's Dedicated Products Group. "MPEG technology goes into every digital set-top box and every DVD player, so the industry is expecting significant growth in this market."

Within the MPEG decoder market, SGS-THOMSON was also ranked as the leading supplier of MPEG-2 decoders, which offer higher quality images than the older MPEG-1 system. While MPEG-1 has been used in niche applications and PCs, MPEG-2 is the standard used in digital set-top boxes and will be used in future generation PCs and DVD players. According to Dataquest, SGS-THOMSON had a 71.4% share of the $119 million market for MPEG-2 in 1995.

Guy Lauvergeon, general manager of SGS-THOMSON's Image Processing Business Unit, commented "We believe MPEG-2 is one of the fundamental technologies for digital entertainment and will be prevalent throughout multimedia PCs, DVD players and possibly other products such as set-top box-based Internet terminals and camcorders. Our leadership is based on delivering volume products at the right price. We intend to enhance our current market position by continuing to develop new products and to deliver value added features to our customers and end users alike."

About MPEG

MPEG video compression is the enabling technology that brings to consumers a world of remarkable new products like audio-size (5-inch/12cm) compact disks that store several hours of video, and direct satellite TV that brings hundreds of TV channels to every home.

Why is compression needed?

Digital video signals need to be "compressed" because an immense amount of data is needed to represent a standard television picture -- about 200 million "bits" of data per second. That's roughly equivalent to sending the information content of ten bibles every second.

A standard compact disk -- the regular 5-inch/12cm audio disks -- can only handle data at up to about 1.5 million bits per second, so the digital video signal must be reduced by about one hundred times before it can be stored in this medium. Similarly, digital TV transmission is only feasible using compression. Otherwise it would take up too much channel space in the airwaves.

In both cases the digital video signal is compressed by applying the MPEG coding method to the original signal, then later "decoding" it later to restore the original data for display. The overall process is usually called "compression".

Where is MPEG Compression Used?

MPEG compression plays a vital role in the Hughes DirecTV digital direct broadcast satellite TV service. MPEG compression provides 150 TV channels directly to homes throughout the USA and parts of neighboring countries. SGS-THOMSON provides the key MPEG decoder chip for the RCA set top decoder box. Without this component DirecTV would be unthinkable.

The same MPEG compression technology is used to bring video capability to regular 5-inch compact disks. MPEG-2 video compression allows several hours of video to be stored on one 'DVD' CD, rendering today's laserdisk players obsolete and cutting video disk costs. This technology also enhances other CD-based applications like games, Karaoke machines and CD-i players, which can all use full motion video in addition to computer graphics.

MPEG technology also finds applications in multimedia computers, where the addition of MPEG hardware brings full motion video capability to software that combines text, pictures, sound and video.

The Future......

Digital TV and DVD products are important milestones on the route towards future home terminals which marry television, computer and communications technology. This is the logical conclusion of a technological convergence brought by the adoption of digital techniques in all three fields.

This convergence also favors the widespread use of interactivity, where users interact with media, rather than just watching passively. Interactive television is feasible using conventional analog TV and phone lines, but it will only become popular with the introduction of digital services.

In parallel with the convergence of media the semiconductor industry is moving towards superintegration, where advanced technology allows many functional blocks to be integrated on the same chip, bringing highly complex functions within reach of consumers. Superintegration chips will combine powerful microprocessors, digital signal processors, dedicated circuits like MPEG decoders and other elements.

SGS-THOMSON Microelectronics is a global independent semiconductor company listed on the New York Stock Exchange an on the Bourse de Paris. It designs, develops, manufactures and markets a broad range of semiconductor integrated circuits (ICs) and discrete devices used in a wide variety of microelectronic applications, including telecommunication systems, computer systems, consumer products, automotive products and industrial automation and control systems.

Maria Grazia Prestini,
Corporate Press Relations Manager
Saint Genis-Pouilly, France
Tel : +33 50402532
Fax : +33 50402860

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