For Immediate Release
“We see the growth coming, certainly in the second half of 2010 and beyond,” Zoran CEO Dr. Levy Gerzberg tells “A Conversation with Semitrends” audience
Leading Provider of Integrated Solutions for Digital Entertainment and Imaging Markets Believes Growth for Market Segments in which it Participates “Will Be Somewhere in the High Teens”
Dallas, TX — May 14, 2010 — The primary market drivers in its digital entertainment and imaging markets “all are quite exciting because we constantly see new technologies, more and more applications, and more and more people using these technologies everywhere in the world,” Zoran Corp. (NASDAQ: ZRAN) executives told members of the financial community today.
Speaking on “A Conversation With SemiTrends,” Zoran president & CEO Dr. Levy Gerzberg, said that in digital television (DTV), in particular, “one of the major market drivers has been the move from analog to digital. We see that the refresh rate of the LCD panels is increasing and it drives the need for SupraFRC®,” Zoran’s proprietary frame-rate conversion technology which it is now shipping.
The result of a very unique set of mathematical algorithms Zoran developed, SupraFRC® is different from traditional motion-estimation compensation, or MEMC technology. “It provides much higher quality of video at a higher frame rate and at a lower cost and lower power consumption,” Gerzberg said. “We’ve already deployed this technology & have many design wins.” What’s more, “we have demonstrated both 120Hz capability and 240Hz, and with this technology we already have a solution for 3-D TV that will be launched in the near future.”
There are other applications for SupraFRC® technology which Zoran “will deploy in the future.” For example, when consumers generate video for YouTube, usually the quality is not that great. “We believe our technology will be used to enhance this kind of video application,” Gerzberg said.
Another exciting driver Zoran sees in the market is Internet connectivity. “We are already providing connected solutions and drivers like Netflix, Vudu, RoxyNow , and Yahoo Widgets. They are bringing new applications to the living room and this is a major driver for both DTV and DVD players,” Gerzberg noted. Also, Blu Ray players are connected and enable download of movies and other applications via the Internet. Blu Ray, itself, is another key driver. “We will enhance this growth with a new Blu Ray solution that will be more affordable, with higher quality than what is available today,” he said.
While some market forecasters envision that upwards of 40% of the flat-panel TVs shipped will have Internet connectivity by 2013, “I wouldn’t be surprised if growth is greater than currently being prognosticated,” said Zoran’s senior VP and CFO Karl Schneider. “All kinds of applications are being delivered directly to the TV, making it a simple consumer experience with all accessible to the finger tip via the remote control.” By offering HDTV platforms that integrate processors, other components and middleware for a turn-key solution, he added, “We are prepared to take advantage of these market opportunities.”
Referring to reports of an accelerated opportunity in Europe, Gerzberg said Zoran started to ship HDTV platforms to Europe this quarter. “We have a new product aimed at the European market. Europe is a very important market for us. We are growing from almost nothing in this market to a good market share in the next few years, It’s already starting to happen for us.” Also, Zoran has a new technology that covers several geographies in the world just by changing the software. “This aids manufacturers to have better control of their supply chain and faster reaction to market demand in different geographies,” he noted.
Zoran has had a good measure of success in penetrating Tier 1 DTV OEMs in Japan, Korea and China, primarily by working through original design manufacturers (ODMs) , as it has done in other product segments. However, with its SupraFRC® technology, “Zoran has won design wins gained directly by working with two Tier 1 manufacturers,” Gerzberg noted, “with more coming.”
Another strong driver for Zoran, noted Gerzberg, is the move to high-definition digital camcorders. “These new cameras also have all kinds of new features like face tracking and even face recognition. We can recognize specific faces in the camera and select only those faces to be displayed. We see all kinds of new applications that are driving the growth in this market, FaceBook, YouTube, and other applications”. Furthermore, there are global markets, like China, eastern Europe, South America, India & other geographies that, he said, “have not experienced the benefits of these cameras and now they are starting to benefit.”
Overall, for Zoran’s digital camera business, which represents nearly 45% of revenues, Gerzberg said: “Growth is occurring in all segments and all geographies. We are everywhere in digital cameras. We are in every third camera being shipped around the world.” Gerzberg calculates that Zoran’s customers are shipping nearly 100 new digital cameras per minute. “We are doing well, and now we are starting to see very good results from the new, video-centric segment, such as the Flip Video Camcorder which, now owned by Cisco, is powered by Zoran and, he added, “is being deployed in more and more countries.”
Zoran has been successful at penetrating Tier 1 digital camera OEMs in Japan and elsewhere in the Asia-Pac region. Among these are Casio, Olympus, Fuji Film, Sony, Nikon and Samsung “which has moved into third place in the market.” Virtually all major Tier 1s, except for a couple of camera suppliers who are using their own custom devices and who may also switch one day to solutions from Zoran, Gerzberg continued, “as are new manufacturers in other countries such as China.”
Zoran presently has about a one-third share of the digital camera market, with its nearest competitor holding about a 7% market share. While much of this success can be attributed to the first 11 generations of its COACH (Camera on a Chip) processor family, Gerzberg stated: “We have raised the bar with the COACH 12 product which has features never before introduced to the market.” Not surprisingly, ASPs on these high-end processors “are holding up well,” added Schneider, “as competitors still have a ways to go to catch up, especially on the merchant side.”
A new vector that is gaining momentum for Zoran, Gerzberg noted, is the enterprise laser market. The same can be said of wireless printing, he added, “where you will be able to print from your cell phone directly to a printer wherever you will be. This is a challenge and we believe we have a technology to address this opportunity.”
In multi-function printers (MFPs), Gerzberg claimed that Zoran has “a very strategic advantage” in that it offers both enterprise software and SOCs. “Our competitors don’t have the kind of printer software we do, and now we’re bundling with SOCs.” He cited a recent deployment of Inferno, Zoran’s Linux-based firmware platform for its Quatro family of processors, at a leading digital printer customer in Japan. “In just a couple of days new silicon came up and the customer had a pre-production prototype.”
Overall, Zoran is benefitting from what Gerzberg described as “stickiness.” Once customers are using Zoran chips and its software and its tools, he said: “It’s very difficult for them to move to a competing solution. And if they really like your solution they stick with you for a long time. So when the next chip comes out we make sure that the software is backward compatible to the older software and that everything our customers developed before, they can use on the new chip.”
Zoran is also being helped by advances in process technology. One major step it took was to move to 40nm technology. “So far, we’ve been shipping mostly at 80 nm. We have skipped a generation, skipping 65nm and are moving to 40nm, not only to increase performance and enable us to decrease costs, but also to decrease power consumption which is very important.” On top of this, he noted “we are developing new technologies related to software in conjunction with silicon and new packaging technologies which are very important for cost reduction and energy savings,” among other benefits.
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About Zoran Corporation
Zoran Corporation, based in Sunnyvale, California, is a leading provider of digital solutions in the digital entertainment and digital imaging markets. With over two decades of expertise developing and delivering digital signal processing technologies, Zoran has pioneered high-performance digital audio and video, imaging applications and Connect Share Entertain technologies for the digital home. Zoran's proficiency in integration is designed to deliver major benefits for OEM customers, including greater capabilities within each product generation, reduced system costs, and shorter time to market. Zoran-based DTV, set-top-box, DVD, digital camera, multimedia mobile phone, and multifunction printer products have received recognition for excellence and are now in hundreds of millions of homes and offices worldwide. With headquarters in the U.S. and additional operations in China, England, France, India, Israel, Japan, Korea, Sweden and Taiwan, Zoran may be contacted on the World Wide Web at www.zoran.com or at 408-523-6500.