Intel Inside (Your TV)

Best known for dominance in computers and servers, Intel is preparing its chips for digital televisions, internetnews.com has learned.

The Santa Clara, Calif.-based chip making giant would not comment on the published reports circulating this week, but sources say Intel will announce new semiconductors for television manufacturers during the Consumer Electronics Show (CES) next month in Las Vegas.

Intel President and COO Paul Otellini is scheduled to give a keynote highlighting the next stage of Intel’s growth in developing new ways to enhance how consumers live, work and access information.

According to sources close to the company, Intel’s TV chips are more than likely going to be based around a version of liquid crystal on silicon (LCoS) — a type of LCD , in which the crystals and electrodes
are sandwiched between polarized glass plates. The technology is easier to make, has a higher resolution and can be put into smaller form factors than regular LCDs.

Given the increase in flat screen computer displays and television monitors, the crossover should be quite easy. Dell and Gateway already sell the popular plasma video screens. Hewlett-Packard has announced its intentions to join the party. All three are core partners with Intel.

Intel’s entry into digital televisions brings it into direct competition with Phillips , Sony Electronics and Texas Instruments , which makes a digital light processor (DLP).

Industry analyst Rob Enderle said it would make sense for the company to move into making chips for digital televisions, which he calls a “fantastic growth space”.

Flat panel televisions haven’t even hit their optimized price point,” he said. “For Intel to enter this realm is a natural business progression. It could be both lucrative and fast growing for them.”

Enderle also noted that Intel has been going after chip business where it has not already made inroads. Beyond its bread and butter PC and server business, Intel has branched out into cell phones, PDAs, cameras with its XScale processors.

Unlike the last time Intel dove into the consumer electronics sector, Enderle said this time the company is really evaluating which areas it can and cannot dominate. Digital TVs also dovetail nicely into Intel’s overall vision of a fully connected home.

Intel’s plans also complement the FCC’s so-called “Plug & Play” ruling. The industry’s mandated switch to digital broadcast signals by 2007 means that retailers will be selling televisions that decrypt and receive one-way digital broadcasts without consumers having to rent or buy a set-top box from cable providers.

There is also an incentive by consumers to act fast as the price of dumping their older CRT-based televisions and monitors start to rise. Hazardous disposal fees are increasing across the board not only because of their toxic nature but also because cash-strapped local governments see it as a way to collect additional revenue.

“If you think about it landfills charge between $25 and $80 to get rid of CRTs,” Enderle said. “In the near future that cost could be as high $400 especially in Europe.”