Cirrus Snags DVD Chip Deals

Cirrus Logic , a supplier of processors and software, has won two new contracts from manufacturers of DVD players and personal video recorders as falling prices for the devices spur consumer demand.

Taiwan’s Sampo and China’s BBK now make products using components from the Austin, Texas, company, joining Bose, Pioneer, Onkyo and Toshiba as customers. Financial terms of the deals were not disclosed.

While the market for the entertainment devices is accelerating now, thanks in large part to the cost ebbing below $500, Cirrus’ purchases of Share Wave and Luxonar in 2001 were pivotal.

“What you’re seeing now in our customer wins in digital video recording are the fruits of those acquisitions, as each provided key technologies necessary to that market (DVD encoder, DVD processor),” Cirrus Logic spokesman Bill Schnell told internetnews.com.

Some industry watchers agree.

“Cirrus took an early leadership in the digital video encoding market — a move that has helped it become one of the top three suppliers today,” said Michelle Abraham, senior analyst, In-Stat/MDR.

The company does not break-out revenue by product line, so it’s difficult to say how much DVD and PVR componenents contributed to the company’s $262 million in fiscal 2003. The company’s products are also used in commercial audio, automotive and industrial applications.

Earlier this month, Cirrus said its first-quarter results would be at the low end of previous guidance. Official numbers will be released July 23.

But there’s still a lot of growth left in the consumer market, analysts say. According to In-State/MDR DVD recroder prices will drop to less than $400 by the end of this year and possibly under $300. At that price, more consumers will purchase DVD recorders, the research firm said.