Raytheon looks to commercial video

Electronic News, Dec 20, 1993 by Jim DeTar

MOUNTAIN VIEW, CALIF.--Defense conversion-minded Raytheon Semiconductor's recent acceleration into video IC markets, including partnering with Macrovision Corp. for its pay-per-view (PPV) anticopy technology, is part of a larger plan to grow sales revenues based on high-volume commercial IC products. Raytheon is also studying other companies as possible acquisition targets.

"What we are doing is evolving our products into high-volume consumer grade products, getting more into the mainstream by taking advantage of our manaufacturing capability in Mountain View," said Bill Bucklen, Raytheon's marketing manager for digital video at La Jolla, Calif.

Another facet of its conversion plan is to partner with comnpanies providing distinctive video and networking technologies. Earlier this month, Raytheon

signed a licensing agreement with Macrovision to build and sell large-scale ICs which include a patented PPV copy protection feature that prevents users from copying programs broadcast over cable channels.

Raytheon will offer off-the-shelf components to other Macrovision-licensed companies that make digital compressed video cable set-top converters and satellite receivers. Macrovision's system will be embedded in Raytheon's new TMC22290 digital video encoder IC, in order to hamper efforts to bypass or defeat copy protection circuitry.

Raytheon bought the TRW LSI organizations in September 1992. Now called Raytheon La Jolla, the unit designs multimedia, video and digital signal processing (DSP) components, as well as associated data conversion products. Mr. Bucklen, an 18-year veteran with TRW LSI, said TRW's broadcast focus fit into Raytheon's strategy.

"We (TRW LSI) had beem eagerly wating for digital video to reach the consumer. Cost of memory was an issue. Cost of raw horse-power in terms of MIPS was prohibitive. You can see the curve. A couple of years ago we crossed it. The purchase of TRW LSI was an element of Raytheon's thrust into

the commerical video business. We are also doing work on the analog side. Raytheon is building an organization that can support both analog and digital video processing."

In the year prior to its acquisition by Raytheon, TRW LSI had sales of approximately $25 million. Raytheon was seeking way to expand its IC business, begun in the 1960s. The acquisition of TRW LSI was viewed by some market observers as a cornerstone for major expansion into the mixed-signal IC business.

Last year, Raytheon began recruiting marketing talent for its current push into the video-speed IC markets. Aki Kaniel joined Raytheon in a product-planning capacity after leaving a post as strategic marketing manager at Elantec, Inc.; and in June of this year, Syrus Madavi was named president of Raytheon Semiconductor. Mr. Madavi founded Honeywell's semiconductor business, which was later established as Signal Processing Technologies, Inc.

Mr. Bucklen, who attributes the recent strong thrust in the commercial IC and video markets to Mr. Madavi, said Raytheon remainas on the acquisition trail. "Moving into video and high-speed networking components is another thrust in the commerical area. It's part of an aggressive growth strategy at Raytheon. Syrus has been the architect of the growth plan. The TRW acquisition was the first of the plan but probably not the last. The Macrovision agreement positioned us for settop digital video. I expect to see at least one system introduced next year with the TMC22290 chip."

Bill Krepick, Macrovision's senior VP, said, "By making it easy to acquire these off-the-shelf components, box manufacturers will be able to offer their customers, the PPV system operators, a feature which will enable them to provide copy protection to the program suppliers."

Raytheon's encoders are designed to convert MPEGI and MPEG2 video decoder outputs into analog video composite and S-Video outputs compatible with all current NTSC and PAL VCRs and TVs. It recently unveiled several new parts, including the TMC22x5x digital decoder, the TMC22071 genlocking video digitizer and the TMC22x9x series; existing parts were the TMC22080 digital video mixer and TMC2302 image manipulation sequencer.

"As the digital revolution reaches the set-top, we are moving aggressively to provide performance and features that will make the video experience of the '90s both breathtaking and profitable," Mr. Bucklen said.