* New chip to compete with Audience, Cirrus Logic
* Expected to be significant addition to DSP revenue in 2014
* Markets for chip include mobile, smart TVs, PCs, autos
By Tova Cohen
HERZLIYA, Israel, Feb 6 Israeli multimedia chip
designer DSP Group will compete head-on with audio
technology heavyweights Audience Inc and Cirrus Logic
Inc when it launches its first chip designed for mobile
phones at the end of the month.
It expects the new HD Clear noise reduction chip to help it
build its mobile sector business to account for a third of its
revenue within three years.
The technology will enable people to use their cell phones
for conversation in any condition, whether in a car, on a train
or in a noisy club, DSP said. It will also facilitate the use of
speech recognition and voice commands by eliminating background
Samsung Electronics uses noise-filtering
technology from California-based Audience while Apple
uses audio chips from Cirrus Logic in its iPhone. Audience's
technology is used in two prior generations of the iPhone, but
not in the iPhone 5.
DSP said its chip, at 3x3 mm, is nearly 20 percent smaller
than the most advanced comparative chip on the market.
"We will be the smallest and most efficient chip in the
market," chief executive Ofer Elyakim told Reuters in an
interview, adding the technology will allow only the speaker to
be heard in a room with noise.
"We are the only company that has technology to cancel noise
when using speaker phone, in a hands-free mode," he added,
noting the other technologies can only be used in normal
Research firm IDC estimates that 63 percent of all mobile
units will have technology to eliminate background noise by
2015, or about 1.7 billion units, up from 500 million in 2012.
Elyakim, who estimates each unit sold is worth $1, expects
DSP Group to become a major player in this market.
"I expect our revenue growth not to look different than that
of Audience," Elyakim said.
Audience last week posted fourth quarter revenue of $38.7
million, up from $18.0 million a year earlier.
"We expect this chip to be a significant addition to our top
line in 2014. There could be some contribution in late 2013,"
He said he would be surprised if the company did not obtain
$30 million in sales from the chip in 2014.
DSP expects noise elimination technology to be increasingly
integrated in mid-range smartphones and feature phones and not
just the most expensive devices. Other addressable markets for
the chip include smart TVs, game consoles, personal computers
Until now DSP Group has focused its efforts on providing
wireless chips for cordless DECT phones used in homes, where it
has a 70 percent market share. It recently branched out into
voice over Internet protocol for office phones, where it is No.
3 after Texas Instruments and Broadcom.
"According to our long-term model, home, office and mobile
should each account for a third of sales," Elyakim said.
The company earned $775,000 excluding one-off items on
revenue of nearly $163 million in 2012.