Taiwan: Changing scenes in audio chip market

Overwhelmed by iPod fever, the portable media player has shifted from being an IT application to a consumer electronics device, making it more affordable for the end-user. The shipment of MP3 players in 2005 reached 58 million units and will grow to 132 million in 2009, according to a report by iSuppli. Meanwhile, the audio chipset market for personal media player will reach $6.4 billion in 2009.



Taking advantage of the growing trend of portable audio devices, local fabless design houses in Taiwan are investing heavily in MP3 and WMA codecs. Currently there are over 20 fabless design houses in the island that are developing audio chipsets for MP3 players based on flash, hard disk or memory card.VISTA DRIVE

Another industry development that will impact the audio chipset market is the newly launched Microsoft Windows Vista. This operating system requires the most upgraded multimedia performance in the PC platform, and is expected to boost the audio chipset market in the computer sector.



"Audio chipset manufacturers need to provide full-featured audio user interface to permit very userfriendly setup and configuration," said Jessy Chen, vice president and spokesperson of Realtek Semiconductor Corp. "Our new audio driver and high-definition audio codecs for Windows Vista provide enhanced sound performance and voice quality within PC systems —reinforcing both multimedia and VoIP applications."



IP READY

Besides fabless design houses, design service providers are developing IPs for audio chips. Global Unichip, a local IP service provider, provides serial solutions for audio chips. These contain customized solution, RTL backend layout and hardware implementation.



Local companies like Sunplus Technology Co. Ltd, Ali Corp. and Avid Electronics Corp. are aggressively developing audio chips for MP3 players, WMA and flash media players. Avid Electronics offers an audio SoC-integrated FM stereo transmitter which is suitable for MP3 and WMA.



After Mediatek's acquisition, Ali has become more focused on its multimedia and audio chips. The company has a WMA chip with enhanced performance in power management.



The worldwide market share of audio chips for MP3 devices is estimated at 5 percent, according to a report by the Science and Technology Policy Research Information Center (STPI), a government organization with a mandate to support scientific and technical communities and the innovation process. So far, audio chipsets adopted by iPod are still dominated by companies like Sigmatel, PortalPlayer, Wolfson, Cypress and Broadcom.



The local audio chipset providers could only cut in the market of lowend MP3 players. Local fabless companies are hoping this will change, as they are now integrating advanced functions like USB 2.0 interface into their audio SoCs to be able to compete with MNCs in high-end audio chip market.