Silicon Image Sees All Smartphones Soon Having MHL Connectors
Silicon Image boosted its 2012 forecast on shipments of products bearing Mobile High-Definition Link (MHL) connectors to 175 million units from 100 million in its previous forecast because of growing demand in China, where suppliers Huawei and ZTE are among its customers, CEO Camillo Martinez said on an earnings call.
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While the bulk of Silicon Image’s MHL-related revenue has come from Samsung and LG smartphones, the addition of Chinese suppliers means MHL connectors could find their way into 100 percent of smartphones “within a number of years,” Martino said. MHL-based smartphones in China are expected to get “into volume production” in the second half, he said. China is approaching “double-digit” share as a percentage of Silicon Image’s MHL product mix, Martino said.
To bring MHL into lower priced models, the technology could be combined with another chip in “a couple of years,” Martino said. Silicon Image officials have mentioned merging its MHL and WirelessHD technologies on a single component IC. MHL, which also has been built into Samsung and Toshiba TVs, will emerge as an “integrated TV solution” in 2013 and move into mobile phone processors a year later, Martino said. The MHL consortium is developing a 2.0 standard.
"Remember, the standard is further advancing in real time, so as long as the standard continues to evolve at a regular clip or every one to two years, I think you are going to see this business model continue to thrive,” Martino said. “Our goal is to make this adopted 100 percent across all smartphones. That is our goal. It’s not going to happen in six to 12 months. It’s going to be a number of years for that to happen, but we understand our mission and we're well on our way to achieving it."
As part of that effort, Silicon Image expects to land Microsoft’s endorsement for MHL within “the coming year or so,” Martino said. That support could come in Windows 8 for tablets and Windows Phone 8, analysts said. Silicon Image completed development of MHL chips for Windows 8-based phones earlier this year.
While Silicon Image’s CE-related business struggled, TVs are “strategically important” to the health of the company’s mobile business and expanding the MHL “ecosystem,” Martino said. In addition to Samsung and Toshiba, Sharp and Best Buy’s Insignia are fielding MHL-equipped TVs. Silicon Image’s CE business is forecast to decline 10 to 15 percent this year, but is expected to “stabilize” in 2013, based on increased deployment of MHL and WirelessHD in products, Martino said. Silicon Image inherited WirelessHD when it bought Sibeam last year. “Display is very important for a company like us as we try to drive the industry connectivity standards,” Martino said. “If we try to drive these standards, it’s very important that we participate on both ends of the connection."
Silicon Image is in production with third-generation WirelessHD chips and expects to see PC and CE products bearing them to arrive at retail in the “coming few quarters,” Martino said. The third-generation WirelessHD chips had been expected in tablets in the first half (CED Oct 7 p1). Silicon Image is developing separate WirelessHD chips for tablets and smartphones that continue with a 300 MHz processor, but are about 40 percent smaller and have a 9mm height. Silicon Image is “deep in development” of WirelessHD for mobile products, Martino said. Third-generation chips conform to the WirelessHD 1.1 spec and boost the speed for data and video transmissions to 1 Gbps. The new chips, which are expected to be priced in the $5-$6 range, are being produced by Taiwan Semiconductor Manufacturing Corp. using a 65-nanometer process.
The “most significant opportunity” for WirelessHD is in tablets and smartphones, Martino said. Silicon Image will sample chips with “strategic” mobile customers by year-end, he said. Mobile products containing the new WirelessHD chips could be available in second-half 2013, Martino said. The WirelessHD business generated less than $10 million in revenue in 2011 and will be “slightly higher” this year, the company has said (CED March 9 p2).
Silicon Image’s Q2 net loss narrowed to $943,000 from $9.5 million a year earlier as revenue jumped to $63.8 million from $55 million, topping analyst expectations for $60 million. Product sales increased to $51.4 million from $43 million a year earlier, while licensing revenue rose to $12.3 million from $11.8 million. Selling, general and administrative costs shrank to $14.1 million from $16.1 million. Inventories increased to $17 million from $10 million.