Intel switches off LCOS TV chip

Intel has decided to cancel its project to develop an LCOS (liquid crystal on silicon) chip that would bring down the cost of rear-projection televisions, an Intel spokeswoman said Thursday.

The project, codenamed Cayley, was first discussed at the Consumer Electronics Show in January, where Intel President Paul Otellini told attendees Intel would have a television chip ready by the end of 2004. In August, Intel pushed the expected launch into the first quarter of 2005, saying that it wanted to focus on bringing a differentiated product to market.

But like many other Intel projects this year, Cayley did not turn out as expected. The Santa Clara, California, company looked at the investment it had already put into Cayley, and at the expected return, and decided it needs to focus on products that will bring a higher rate of return, said Shannon Love, an Intel spokeswoman.

"We're stopping development completely," Love said.

Cayley was an attempt to bring the same kind of volume economics that have gradually lowered PC prices to the digital television market. Intel thought Cayley would allow vendors to sell 50-inch digital televisions for less than US$2,000, a substantial discount from the US$3,000 price tag that most customers are faced with today.

Intel started off with plans to develop a one-megapixel LCOS chip but realized it needed a two-megapixel chip to compete with Texas Instruments' success in selling one-megapixel chips for televisions, it said in August.

The LCOS project was not thought to be extremely difficult from a manufacturing standpoint, but the implementation of the technology is tricky, according to analysts and Intel executives. Intel builds transistors as well as any company in the world, but it did not have a great deal of experience integrating liquid crystal and colored glass above those transistors.

Intel's Love declined to comment on whether the company ever produced a working two-megapixel chip.

Cayley joins a long list of canceled projects and missteps at Intel this year. Since Otellini first publically discussed Cayley in January, Intel has canceled two future processor cores, capped the speed of its flagship Pentium 4 processor and uncharacteristically suffered manufacturing glitches and product recalls.

The company has vowed to refocus itself on delivering products that can be manufactured in high volumes. These include Pentium 4 processors with more cache, multicore processors, and flash memory.

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