CSR’s DTV Chip Business Unlikely to See ‘Significant’ Revenue Growth Before 2013
CSR’s newly acquired digital TV chip business won’t post “significant revenue” growth until 2013, when Zoran’s processor technology is better integrated with the company’s Bluetooth and WiFi chips, Anthony Murray, senior vice president of CSR’s newly formed Home Division, told us Wednesday at an investor conference in New York. CSR completed its $484 million purchase of Zoran earlier this month (CED Sept 2 p3).
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CSR will keep Zoran’s SupraHD standalone DTV processors that are a “key differentiator” for customers, while dropping those that are a “drain on resources,” Murray said. The combining of the technologies will largely be done through software, and development will be spread across CSR’s automotive, home and mobile divisions, Murray said. CSR will “reduce focus” on less-profitable DVD player and set-top box processors, while stepping up development of ICs for higher-end TVs, Chief Financial Officer Will Gardiner said.
CSR won’t cede the low-end TV business to competitors MediaTek and MStar, the company said. Instead, advanced technology will be introduced in ICs for higher-priced TVs and “cascaded down” across the product line so that some elements also reach less expensive sets, Murray said. “We will not show revenue growth in the short term” in DTV and “it’s only when the new roadmap starts to kick in 2013 and 2014 we will see the advantages of that,” CSR CEO Joep van Beurden said.
As CSR works to combine Zoran’s DTV technology with its own expertise in WiFi and Bluetooth, the company is also maneuvering to possibly land some of the DTV business that was freed up by Broadcom’s cutbacks, Murray said. Sources have said Broadcom laid off 130 employees in its DTV division in Toronto and Yardley, Pa., as it scales back TV and Blu-ray processor development. Among Broadcom’s major DTV customers are LG Electronics and Samsung. Zoran’s customers include Philips and Toshiba. In addition to the SupraHD processors, Zoran had frame rate conversion ICs, the most recent version of which is the FRC501.
While CSR is pursuing Broadcom customers, it’s less interested in the company’s DTV-related IP portfolio, much of which came from its 2008 acquisition of an Advanced Micro Devices business, the company said. CSR is forecasting having $200 million in cash available at fiscal year-end, part of which could be used for acquisitions, it said. Zoran is projected to generate $340 million to $370 million in revenue and $230 million in operating expenses this fiscal year, it said. CSR’s operating expenses are expected be 44 percent of annual revenue by first half 2012 and eventually drop to 33 percent in three to four years, Gardiner said.
CSR also will retain the silicon tuner business that Zoran inherited when it bought Microtune last year. The silicon tuners are used in set-top boxes and TVs. The tuners will “continue to evolve” largely for TVs, Murray said. “We want to ensure that we have the best from the RF reception to the screen,” he said.
Meanwhile, CSR has a “couple of very major” cellphone customers awaiting samples of the company’s new SirfstarV GPS chip, the first of which will arrive in Q1, said Ahmet Alpdemir, senior vice president of mobile. The SirfstarV chip is based on Global Navigation Satellite System (GNSS) technology that can be used to display moving maps and information about location, speed, direction, nearby streets and points of interest. It also has an anti-jamming feature that uses filters to prevent potential interference caused by the overlapping of Long Term Evolution (LTE) and GPS bands, Alpdemir said. It also sports power management technology, including a micro-power mode that’s designed to turn parts of the GPS function down when it’s not actively searching for a signal, Alpdemir said. CSR didn’t identify potential SirfstarV customers, but Samsung has used CSR’s GPS chips in its cellphones.
CSR’s new CSR9800 combo Bluetooth/WiFi chip for smartphones will generate a small amount of revenue in second half 2012 but will be a major contributor to sales by 2013, van Beurden said. The chip will be produced using a 40-nanometer process, the company said. CSR also is sampling its Coach 14 CMOS image processor for cameras and it’s capable of 1080p video at 30 fps, Alpdemir said. Most of the major camera suppliers use Coach chips except for Canon, which continues to develop its own image processor ICs in house. CSR has had some “very positive meetings” with potential customers for the Coach 14, said Alpdemir, who declined to say whether those talks involved Canon. CSR also is continuing Zoran’s development of a Coach IC that can handle 1080p video at 60 fps, Alpdemir said.