TranSwitch Readies Transceivers With HDMI, DisplayPort, MHL Support
TranSwitch’s sharpened focus on video-related components could generate $20 million in revenue this year as it deploys HDPlay transceivers combining support for HDMI, DisplayPort and MHL, CEO Ali Khatibzadeh said at the Needham investor conference in New York. The chip developer has gained more than 50 “design-ins” for the HDPlay chip and will need to land purchase orders for slightly more than half that total to produce $20 million in video-related revenue, Khatibzadeh told us.
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The HDPlay, which is being built using a 65-nanometer process, is a single chip with independent ports for HDMI 1.4a, DisplayPort 1.1a, and MHL 2.0 and has a built in CEC controller that allows HDMI devices to control each other and operate multiple products with one remote. Previously, each of the connectors required a separate port. The HDPlay chip also is expected to be compliant with the upcoming HDMI 2.0 spec that adds supports for 4K resolution at 60 Hz, Khatibzadeh said. The HDPlay devices are priced around $2 to $3, he said.
TranSwitch hasn’t identified potential HDPlay customers, but it has an existing licensing agreement with Samsung to build TranSwitch HDMI technology into Samsung’s TV video processors, Khatibzadeh said. In addition to TVs, TranSwitch is targeting pico projectors, the market for which is expected to hit 16 million units by 2015, according to Pacific Media Associates. TranSwitch expects its HDPlay products will address about half that potential market, Khatibzadeh said.
TranSwitch also has developed HDMobile, a chip that combines HDMI 1.4a, DisplayPort and USB 3.0 interfaces for use in smartphones and tablets. It also has adopted a licensing strategy for HDwire, which uses pulse-amplitude modulation as a high-speed alternative to the low-voltage differential signaling typically built into TVs and other displays. HDwire supplies speeds up to 60 Gbps and supports 4K and 8K as well as reverse data channels for HD cameras and microphones on display panels. HDwire can support the higher resolutions with a single cable, while LVDS requires additional cables to transmit video signals from the video processor to the display panel controller. Replacing LVDS cables with HDwire could drop cable costs in a large-size displays to $1.50 from $10 to $15, Khatibzadeh said.
The video business is key for TranSwitch as it shifts away from a telecom products business. The company hired patent broker Drakes Bay Co. last year to shop its 150 telecom-related patents that cover wide area and local area networking, DSL and ethernet. The telecom business is expected to generate revenue for TranSwitch for another three to five years. It signed licensing deals valued at $4 million late last year for proprietary software that enables voice-over-IP gateways. The strategy change resulted in TranSwitch taking a $1 million net charge in a nine-month period ending Sept. 30 to cut 64 jobs in Bangalore, India, Fremont, Calif., and at its Shelton, Conn., headquarters. It had trimmed 39 positions a year earlier.
TranSwitch needs to generate quarterly revenue of $8 million to break even, a goal it expects to achieve by Q3, Khatibzadeh said. It posted $4.7 million in revenue in Q3 ended Sept. 30. TranSwitch struck an agreement last year with a Chicago equity investor to supply $11 million in funding. It also sold 1.4 million shares in May 2011, netting $2.7 million to fund operations. Khatibzadeh has invested $1 million in the company in taking a 3 percent stake, he said. TranSwitch received a waiver from Bridge Bank after violating a covenant governing its credit facility in Q3.