pixelworks lcd panel controller price

Such a sharp drop in prices would be an excellent thing for Tualatin display chip maker Pixelworks Inc., which designs and sells microchips for projectors, computer monitors and digital televisions.

Two more local display companies, InFocus Corp. and Planar Systems Inc., could also be affected by the shifting dynamics of the digital television market, though not quite as directly as Pixelworks, which makes chips for all types of digital televisions, regardless of which technology they rely upon: LCD (liquid crystal display), plasma or rear projection.

Research firm ISuppli expects the average price of a 40-inch to 44-inch LCD television to drop from $6,809 this year to $2,560 in 2006, said Sweta Dash, director of LCD and projection research.

"As long as digital TV prices are high, you can"t replace all the billion CRTs [cathode ray tube, the bulky old-technology televisions] out there," said Alley. But as prices come down, "we become a viable replacement." And with Pixelworks offering display controller chips for all types of digital televisions, that just means a bigger market for Pixelworks.

When LCD panel prices went up last year, due to tight supply, it was difficult for Pixelworks to maintain its pricing. LCD panels account for 70 percent to 80 percent of the cost of an LCD television; when they go up, "we get huge pressure on the chip price, because manufacturers are trying to maintain retail price," Alley said.

"When panel prices drop, manufacturers don"t mind the chip price so much, because we"re not the tallest pole in the tent." Pixelworks competes with just two other major suppliers of display controller chips, Genesis Microchip Inc. and Trident Microsystems Inc.

Beaverton-headquartered Planar, on the other hand, manufactures televisions and competes with a large number of companies, though its LCD and plasma televisions comprise a very small part of its business.

Planar"s commercial business unit concentrates on flat-panel computer monitors, a business that has grown very quickly for Planar over the past four years.

As the television market grows overall, LCDs are expected to remain the dominant segment in digital television. While ISuppli expects both LCD and microdisplay televisions to increase by more than 320 percent between this year and 2008, the LCD sector will be almost six times larger, selling nearly 37 million systems in 2008, against just over 6 million microdisplay sets.

Wedbush Morgan analyst Craig Berger recently sent a note to clients on Pixelworks Inc. (NASDAQ:PXLW), the Oregon-based designer, developer and marketer of semiconductor devices and software for advanced multimedia products. Past Wedbush notes have been bullish on the company but after another quarter of dismal earnings (or lack thereof), Wedbush has decided to lower their rating for shares of PXLW from BUY to HOLD. The note follows: • We were wrong to have been constructive on PXLW over the past year and are downgrading shares to HOLD given our view that the firm will not recover as much lost TV business in 2007 as we were previously hoping for. Design win traction with meaningful customers appears limited in its TV business, and we do not believe holding out hope that PXLW is acquired is reason enough to recommend the stock. We do still believe the firm has a compelling technology position and product roadmap, though we favor Trident Microsystems (TRID) in this space given their strong execution and earnings power. For those still in PXLW, there seems to be potential acquisition appeal from Broadcom (BRCM), NVIDIA (NVDA), TI (TXN), STMicro (STM), or LSI Logic (LSI).

• Pixelworks reported Q2 revenues below our own and consensus estimates, though EPS was a tick better than consensus driven by OpEx spending restraint. Pixelworks recorded Q2 revenues of $30.9 million (-16% QoQ, -25% YoY) and pro forma EPS of ($0.16), worse than consensus revenues but one penny ahead of consensus estimates as management limited operating expense spending. Pro forma gross margins of 40.0% decreased -80bps QoQ and -60bps YoY. Operating margin of –26.1% was an all time low since becoming a publicly traded company.

• Reducing 2006 EPS estimate from ($0.49) to ($0.53), 2007 EPS estimate from ($0.37) to ($0.45), and price target from $5.50 to $2.75 on lower sales forecasts. Our $2.75 price target is based upon a 1.0x multiple of 2006 enterprise value to sales, an appropriate trough valuation, we believe, for chip firms losing money. Historically, Pixelworks has traded within a range of 1.5x to 7.0x enterprise value to sales, with a median multiple of 2.9x. Our target EV/S multiple is below the company’s historic median EV/S multiple because of our concerns about execution and market share losses, in order to discount the very high multiples the company enjoyed during the early part of its history, and to offer a more tempered view of valuations relative to our expectations for increased competitive pressures in 2006.

Pixelworks’ Chip Offering Seems to Be Competitive – Pixelworks product announcements at CES (1/5/06) ended a four-month stretch since its last new product announcement. These solutions nearly refresh Pixelworks’ entire product offering and give us significantly improved confidence that the firm is designing compelling products, can win material customer designs in 2006, and will generally ship its new silicon on-time. Versus its competition, we now believe Pixelworks’ product roadmap is competitive with that of Genesis Micro and Trident Micro in product quality, exceeds that of Genesis Micro (GNSS) and Trident Micro in depth of product offering within the TV signal path, and trails that of Genesis Micro and Trident Micro in chip integration, specifically in the integrated MPEG analog image processor space, a still-nascent market in 2006. We now follow with an overview of Pixelworks’ important new products announced at CES, in order from greatest potential revenue impact to least potential revenue impact: • ‘Pearl’ Image Processor - Pearl, the firm’s latest generation image processor, integrates an HDMI receiver, a 12-bit video decoder, a 10-bit analog to digital converter, a scaler, a deinterlacer, the on-screen display controller, and other image enhancement circuitry. We believe this product is a very competitive analog image processor and is on par with what Trident Micro and Genesis Micro are offering for 2006. Like these firms’ 2006 offerings, this chip contains an integrated HDMI receiver, circuitry that would otherwise be a $2-3 discrete chip. This is the latest block of integration into the analog image processor market for 2006.

• ‘Opal2’ Image Processor – Pixelworks announced an enhanced version of its highly integrated Opal processor, which finally went into production in Q3’05. Opal2 includes an improved analog video decoder and specific improvements aimed at the European TV market. This chip also includes weak signal enhancement, a plus for TV manufacturers.

• MPEG Decoder PWM2020 and PWM2030 – Pixelworks’ new MPEG decoder chips are the PWM2020 and the PWM2030, targeted at Europe and North America. The PWM2020 is a low-cost, single channel MPEG decoder for standard definition digital TV. This chip uses only 32MB of memory versus 64MB of memory required in most solutions, thus saving BOM costs. The PWM2030 is a higher-end, dual channel MPEG decoder chip. Dell is a current Pixelworks customer that uses the PWM2000, the firm’s first-generation MPEG decoder solution. The indigo software solution paired with the PWM product family is a linux-based solution currently used in production TVs, and contains approximately five million lines of software code.

• New Projector Chips (not-named) – Pixelworks discussed a couple of new projector chips at its product demonstration. One chip is a low-cost solution containing significant integration including system memory, driving BOM cost savings. The second chip is a higher-end projector chip including extreme keystone correction and other features.

• PW50 and PW60 Advanced CRT Chips – For the first time in a couple of years Pixelworks has refreshed its lineup of advanced CRT chips for regular tube TVs. These chips are essentially an Opal image processing chip that allows tube TVs to display digital content with higher quality. These chips contain an ADC, a video decoder, a scaler, and other image enhancement circuitry.

• ‘Songbird’ Audio/Video Demodulator – Pixelworks launched a new family of demodulator chips at CES, codenamed Songbird. This chip contains an audio demodulator, a video demodulator and an audio baseband processor for output to a speaker system. Competitors Trident Micro and Genesis Micro are both working on this technology but to our knowledge do not yet have working silicon solutions. This product has been in development for more than a year and represents a major thrust forward in Pixelworks’ long-stated effort to move upstream in the TV signal processing chain towards the tuner. Songbird actually allows customers to buy less expensive single-stage tuners by integrating the intermediate frequency demodulation functionality within more expensive multi-stage tuners. Demodulators separate the audio signal from the video signal so that both signals can be processed further in the signal processing chain.

• ‘DreamStream’ IPTV Reference Platform– Pixelworks launched a software reference design platform to be used with the firm’s BSP-15 Babelfish IPTV chip solution, and represents another step forward for in the firm’s pursuit of garnering IPTV set top box revenues in this nascent market (small $70 million TAM in 2006). This software platform includes functionality for audio and video decoding, wired or wireless network connectivity interface, internet browsing, and digital rights management functionality.

• ‘Peanut’ and ‘Cashew’ Timing Controller Chips – Pixelworks has been working with development partner Samsung to develop programmable timing controllers, a new type of timing controller that helps synchronize the pixels on an LCD panel itself. Pixelworks said they shipped about 100,000 units of this product in Q2’06 to its lead customer Samsung. This product sports a mid-single digit average selling price and could potentially go into many LCD TVs in the future if the chip’s price and performance are compelling versus competing non-programmable solutions available in the market today.

Some Hope Remains for patient investors with new product launches, restructuring program, and executive changes indicating that management is not operating with a ‘business-as-usual’ mentality: 1. Pixelworks’ product roadmap is competitive heading into 2006 as chip integration with Opal2 and Pearl now comparable with products from Trident (SVP-EX/LX) and Genesis (Cortez/Hudson). Also, we believe the firm has the most robust software stack and reference designs of the three competitors, thus enabling the ‘lowest-touch’ solution launch for its customers. Finally, Pixelworks’ HDTV platform is in production and ready to ramp with other customers.

2. Pixelworks replaced its previous head of engineering with a former Toshiba executive in order to speed time to market for new product development. Other structural changes have been implemented within the engineering team to drive better efficiencies between working groups.

3. Pixelworks hired two veteran sales executives to head the Korean sales team and the Japanese sales team, with a particular focus on penetrating key OEM accounts. One of these executives came from a top image processing competitor.

Pixelworks Investment Thesis: We rate Pixelworks a HOLD with a $2.75 price target.We believe Pixelworks will not recover as much lost TV business in 2007 as we were previously hoping for. Design win traction with meaningful customers appears limited in its TV business, and we do not believe holding out hope that PXLW is acquired is reason enough to recommend the stock. We continue to believe that with a low enterprise value of around $125 million, PXLW could be an acquisition target for Broadcom, Texas Instruments, Intel (INTC), Zoran (ZRAN), or LSI Logic. In addition to our concerns over market share losses and product ramp missteps, we also have concerns about the firm’s high operating expense spending compared to revenues and see the need for tight spending control or even spending reductions.

Pixelworks Valuation Methodology: Our $2.75 price target is based upon a 1.0x multiple of 2006 enterprise value to sales, an appropriate trough valuation for chip firms losing money. Historically, Pixelworks has traded within a range of 1.5x to 7.0x enterprise value to sales, with a median multiple of 2.9x. Our target EV/S multiple is below the company’s historic median EV/S multiple because of our concerns about execution and market share losses, in order to discount the very high multiples the company enjoyed during the early part of its history, and to offer a more tempered view of valuations relative to our expectations for increased competitive pressures in 2006.

Investment Risks • ATV Demand and Design Win Risk – Advanced TV chip revenues will account for nearly 60% of total revenues in 2006. If end demand or design wins fail to materialize as expected then Pixelworks’ financial performance will be negatively impacted. Conversely, if the company sells more chips than we expect then our estimates and target price on the stock could be too conservative.

• LCD and Plasma Panel Supply Risk - Pixelworks’ expected revenue ramp is very dependent upon availability of LCD and plasma panels. If either LCD or plasma panel production growth should slow or stall, then Pixelworks’ financial performance would be negatively impacted.

• Price Declines — Given the historical precedent of same-part price declines in the LCD monitor market, we expect aggressive price declines in the company’s ATV image processor chips as volumes start to ramp more significantly in 2H’06. Steep ASP erosion would negatively affect Pixelworks’ financial performance. ASP declines in excess of –15-18% per year will have negative ramifications on Pixelworks’ earnings power.

• Competition — Significant competition is already competing in, or will compete, in the ATV chip market. Chinese or Taiwanese cost leaders may be able to capture significant share. Alternatively, well-funded companies like Broadcom, ATI Technologies (ATYT), and Intel are entering this market and may exercise their substantial resources to take market share from Pixelworks and other incumbent suppliers.

• Integration Risk – Pixelworks has not historically been a leader in chip integration. If the company fails to integrate leading features into its chips, than its business would suffer. Additionally, if the company cannot design and then subsequently integrate a high quality MPEG decoder chip for ATVs then the company’s financial performance could lag in 2007 and beyond.

Pixelworks is a new breed of company that truly operates without borders. We believe this will be the model for companies in the new millennium. We have optimized our culture and operations to take advantage of a dynamic new style of business fueled by technology and free trade in which people, products, and ideas flow freely around our planet. We leverage the strengths of every country and every culture where we do business to create a dynamic, flexible, aggressive engine of growth that can quickly take advantage of business opportunities around the world.

Pixelworks, Inc. designs, develops, and markets semiconductors and software for advanced televisions, multimedia projectors, and flat-panel monitors. Its system-on-a-chip integrated circuits (ICs) or interface IC products integrate a microprocessor, memory, and image processing circuits that function as a computer on a single chip. Its customers include Dell, Epson, Hewlett Packard, InFocus, LG Electronics, NEC-Mitsubishi, Philips, Samsung, Sanyo, Sony, Tokyo Electron Device, and ViewSonic. Close to 90 percent of the company"s sales come from its Asian customers.

Then, in 1996, Alley along with a group of InFocus employees that included Michael West, Robert Greenberg, Bradley Zenger, and Ken Hunkins, decided that they wanted to "make money, have fun, and play fair" and founded Pixelworks. At the time other, larger companies were moving into selling component technology. Pixelworks instead focused on designing and building semiconductors that let flat panel displays translate output signals from such video sources as digital television receivers, digital video disc players, and computers.

At first, Pixelworks focused on the computer market. Its self-contained modules featuring an embedded operating system, source code, and the software tools needed to customize display devices replaced a handful of electronics in flat panel displays and helped flat-display makers reduce the cost of their products. Displays with a Pixelworks controller could show web pages, spreadsheets, and a television broadcast in different windows on the same screen.

Recognized for its innovative product, Pixelworks also stood out in its industry for its distinctive management approach. In its earliest days, Alley ran the company without a strict budget, a style that grew out of his stints at Ford, Boeing, and InFocus Systems. "Most of the metrics and reports you get are like trying to drive the car by looking in the rearview mirror," he said inOregon Business in 2001. "What I rely on is feedback from customers and employees. I can tell you the health of our business by talking with customers much better than I can by reading any report."

Management"s goals in 1997 were to grow revenues in the millions; secure customers in Europe, Japan, Asia, and the United States; and introduce Pixelworks chips into three basic markets, televisions, monitors, and projectors. It achieved those goals and reached $12 million in revenues in its first year. "The problem with any [technology] market is you can"t figure out how big any of these things is going to grow and when," Alley asserted in the sameOregon Business article. His solution: "[Y]ou don"t bet on it happening next quarter or next year. You build a platform that can survive an up, down or sideways market."

Pixelworks also kept costs down by keeping a small staff and asking its employees each to do a variety of tasks. Every new employee that joined Pixelworks was literally issued a set of juggling balls when he reported to work as a simple, physical expression of the company"s expectations of its workers. Most learned to juggle. They also all flew coach and competed to see who could spend the least on lunch.

Pixelworks" founders also believed that their system-on-a-chip ICs would someday be used in televisions, and they thus positioned Pixelworks to influence television design. "We looked at the business model for computers and said if the model works for computers, the model should work for televisions," said Allen Alley, the new company"s chief executive officer in a retrospective 2003Wall Street Journalarticle.

When, in 1998, the recession in Asia led some Asian high-tech corporations to create partnerships and joint ventures with Northwest firms, Pixelworks had the opportunity to enter the television market. Toshiba Corporation, eager to lure work for its new semiconductor plant in Oita, Japan, agreed to absorb some of the cost of developing Pixelworks" first semiconductor for use in flat-panel monitors and high-definition televisions in exchange for assuming its manufacturing business. Toshiba extended a line of credit to Pixelworks on manufacturing and rushed the production of the first batch of test chips.

In 1999, Pixelworks" staff of 45 workers moved into the company"s new 23,000-square-foot office building, and Pixelworks held its third round of venture capital financing, bringing its total capital raised to close to $20 million. This third round of money went to develop the next generation of the company"s ImageProcessor products designed to take advantage of the surge in liquid crystal display (LCD) monitors. That year, ViewSonic, the top-selling monitor manufacturer in the United States, chose the ImageProcessor to power the first flat panel displays to incorporate digital, analog, and video inputs into one display.

Although the company lost $5 million on revenues of almost $13 million in 1999, Red Herring magazine named it one of the country"s ten young companies to watch in mid-1999. Moreover, Pixelworks continued to grow during troubled financial times. When the company held its initial public offering (IPO) in the spring of 2000, the NASDAQ was past its crest and declining steadily. "A lot of people thought we were crazy to go out," recalled Alley in a 2001Oregon Businessarticle, "but one of my philosophies has been, if I can raise the money, raise the money." The money from the IPO went toward working capital and general corporate purposes. Shares, issued at $10 per share in May 2000, reached more than $50 per share by October. Named Technology Company of the Year by the Oregon Entrepreneurs forum in 2000, Pixelworks became profitable in the quarter ending June 2000 and remained so. Total revenues climbed to $52.6 million for the year 2000, and Pixelworks began to supply products to Compaq and IBM, among others.

Beginning in 2000, some of the major electronics manufacturers began to integrate Pixelworks" ImageProcessor architecture into their products. Samsung Electronics employed the ImageProcessor in a line of its flat panel displays in 2000 to provide its monitors with the flexibility to offer video and computer graphics on the screen simultaneously. In 2001, NEC-Mitsubishi Electronics Displays high resolution, premium-quality LCD monitors incorporated the ImageProcessor.

Also in 2001, Pixelworks expanded its scope through acquisitions. With the purchase of Panstera Inc., which manufactured fully integrated handheld devices, it entered the low-cost XDA market. This acquisition also brought with it the technology to offer screenmakers a single-chip solution that combined analog capabilities with an extended graphics array. Pixelworks" second acquisition, nDSP Corporation, strengthened its advanced video processing product and technology portfolio with the addition of low-cost, high-performance video processing ICs and the technology to enhance the image quality of mainstream consumer televisions and other digital display products. The addition of nDSP Corporation, which had two offices and 24 employees in Beijing and Shenzhen, also established Pixelworks" presence in China.

By 2001, the global economic downturn had caused the projector market growth rate to slow to 25 to 30 percent annually, but growth in flat panel displays more than made up for the decline for Pixelworks. Alley acknowledged his company"s luck inOregon Business: "I absolutely believe it is sometimes better to be lucky than good. We"ve done quite well. It"s fundamentally because the markets we sell our products to are still robust." Pixelworks had grown from its five original founders to 150 employees and had revenues of $90 million.

The following year, Pixelworks put together a complete design for the electronics inside LCD and plasma televisions. When Xoceco decided to use this design as the base for its first flat-screen television, Pixelworks" engineers taught the company how it worked and how it could be modified via software. It also acquired rival Jaldi Semiconductor Corporation as part of the move toward consolidation among the manufacturers of chips used in television and computer displays.

Pixelworks finished work on a new video-processing chip, code-named Photopia, in the fall of 2003. Photopia integrated many functions onto one chip, saving space and cost. Alley took the product first to his customers in China, the fastest-growing market for the company"s fastest-growing product line. That

By 2004, consumer trends were leaning toward flat panel and high definition televisions and Pixelworks decided that its immediate future lay in high definition television. Thus, early in 2004, it partnered with byd:sign and Xoceco to introduce a complete line of flat-panel plasma and LCD televisions for sale in the United States. The plan moved Pixelworks into the position of becoming a dominant supplier of microchips for flat panel LCD televisions. In fact, 2004 revenues for the company were $176.2 million, up 25 percent from $140.9 million in 2003. However, the limited capabilities of the manufacturers LCD panels used in computers and televisions, mostly in Asia, kept prices for 30-inch LCD televisions above $1,000 and out of reach of many consumers. Not to have all of its chips in one basket, Pixelworks also began to look to the next logical extension of its technology by adding browsing capability to its products and moving into Internet appliance space.

Principal Subsidiaries: Pixelworks Japan, LLC; Pixelworks Taiwan, LLC; Panstera, Inc.; nDSP Delaware, Inc.; nDSP Corporation; Pixelworks Ltd.; Pixelworks Nova Scotia; Jaldi Semiconductor.

1998: Toshiba Corporation helps Pixelworks develop its first semiconductor for use in flat-panel monitors and high-definition televisions in exchange for assuming its manufacturing business.

Pixelworks is a new breed of company that truly operates without borders. We believe this will be the model for companies in the new millennium. We have optimized our culture and operations to take advantage of a dynamic new style of business fueled by technology and free trade in which people, products, and ideas flow freely around our planet. We leverage the strengths of every country and every culture where we do business to create a dynamic, flexible, aggressive engine of growth that can quickly take advantage of business opportunities around the world.

Pixelworks, Inc. designs, develops, and markets semiconductors and software for advanced televisions, multimedia projectors, and flat-panel monitors. Its system-on-a-chip integrated circuits (ICs) or interface IC products integrate a microprocessor, memory, and image processing circuits that function as a computer on a single chip. Its customers include Dell, Epson, Hewlett Packard, InFocus, LG Electronics, NEC-Mitsubishi, Philips, Samsung, Sanyo, Sony, Tokyo Electron Device, and ViewSonic. Close to 90 percent of the company"s sales come from its Asian customers.

Then, in 1996, Alley along with a group of InFocus employees that included Michael West, Robert Greenberg, Bradley Zenger, and Ken Hunkins, decided that they wanted to "make money, have fun, and play fair" and founded Pixelworks. At the time other, larger companies were moving into selling component technology. Pixelworks instead focused on designing and building semiconductors that let flat panel displays translate output signals from such video sources as digital television receivers, digital video disc players, and computers.

At first, Pixelworks focused on the computer market. Its self-contained modules featuring an embedded operating system, source code, and the software tools needed to customize display devices replaced a handful of electronics in flat panel displays and helped flat-display makers reduce the cost of their products. Displays with a Pixelworks controller could show web pages, spreadsheets, and a television broadcast in different windows on the same screen.

Recognized for its innovative product, Pixelworks also stood out in its industry for its distinctive management approach. In its earliest days, Alley ran the company without a strict budget, a style that grew out of his stints at Ford, Boeing, and InFocus Systems. "Most of the metrics and reports you get are like trying to drive the car by looking in the rearview mirror," he said inOregon Business in 2001. "What I rely on is feedback from customers and employees. I can tell you the health of our business by talking with customers much better than I can by reading any report."

Management"s goals in 1997 were to grow revenues in the millions; secure customers in Europe, Japan, Asia, and the United States; and introduce Pixelworks chips into three basic markets, televisions, monitors, and projectors. It achieved those goals and reached $12 million in revenues in its first year. "The problem with any [technology] market is you can"t figure out how big any of these things is going to grow and when," Alley asserted in the sameOregon Business article. His solution: "[Y]ou don"t bet on it happening next quarter or next year. You build a platform that can survive an up, down or sideways market."

Pixelworks also kept costs down by keeping a small staff and asking its employees each to do a variety of tasks. Every new employee that joined Pixelworks was literally issued a set of juggling balls when he reported to work as a simple, physical expression of the company"s expectations of its workers. Most learned to juggle. They also all flew coach and competed to see who could spend the least on lunch.

Pixelworks" founders also believed that their system-on-a-chip ICs would someday be used in televisions, and they thus positioned Pixelworks to influence television design. "We looked at the business model for computers and said if the model works for computers, the model should work for televisions," said Allen Alley, the new company"s chief executive officer in a retrospective 2003Wall Street Journalarticle.

When, in 1998, the recession in Asia led some Asian high-tech corporations to create partnerships and joint ventures with Northwest firms, Pixelworks had the opportunity to enter the television market. Toshiba Corporation, eager to lure work for its new semiconductor plant in Oita, Japan, agreed to absorb some of the cost of developing Pixelworks" first semiconductor for use in flat-panel monitors and high-definition televisions in exchange for assuming its manufacturing business. Toshiba extended a line of credit to Pixelworks on manufacturing and rushed the production of the first batch of test chips.

In 1999, Pixelworks" staff of 45 workers moved into the company"s new 23,000-square-foot office building, and Pixelworks held its third round of venture capital financing, bringing its total capital raised to close to $20 million. This third round of money went to develop the next generation of the company"s ImageProcessor products designed to take advantage of the surge in liquid crystal display (LCD) monitors. That year, ViewSonic, the top-selling monitor manufacturer in the United States, chose the ImageProcessor to power the first flat panel displays to incorporate digital, analog, and video inputs into one display.

Although the company lost $5 million on revenues of almost $13 million in 1999, Red Herring magazine named it one of the country"s ten young companies to watch in mid-1999. Moreover, Pixelworks continued to grow during troubled financial times. When the company held its initial public offering (IPO) in the spring of 2000, the NASDAQ was past its crest and declining steadily. "A lot of people thought we were crazy to go out," recalled Alley in a 2001Oregon Businessarticle, "but one of my philosophies has been, if I can raise the money, raise the money." The money from the IPO went toward working capital and general corporate purposes. Shares, issued at $10 per share in May 2000, reached more than $50 per share by October. Named Technology Company of the Year by the Oregon Entrepreneurs forum in 2000, Pixelworks became profitable in the quarter ending June 2000 and remained so. Total revenues climbed to $52.6 million for the year 2000, and Pixelworks began to supply products to Compaq and IBM, among others.

Beginning in 2000, some of the major electronics manufacturers began to integrate Pixelworks" ImageProcessor architecture into their products. Samsung Electronics employed the ImageProcessor in a line of its flat panel displays in 2000 to provide its monitors with the flexibility to offer video and computer graphics on the screen simultaneously. In 2001, NEC-Mitsubishi Electronics Displays high resolution, premium-quality LCD monitors incorporated the ImageProcessor.

Also in 2001, Pixelworks expanded its scope through acquisitions. With the purchase of Panstera Inc., which manufactured fully integrated handheld devices, it entered the low-cost XDA market. This acquisition also brought with it the technology to offer screenmakers a single-chip solution that combined analog capabilities with an extended graphics array. Pixelworks" second acquisition, nDSP Corporation, strengthened its advanced video processing product and technology portfolio with the addition of low-cost, high-performance video processing ICs and the technology to enhance the image quality of mainstream consumer televisions and other digital display products. The addition of nDSP Corporation, which had two offices and 24 employees in Beijing and Shenzhen, also established Pixelworks" presence in China.

By 2001, the global economic downturn had caused the projector market growth rate to slow to 25 to 30 percent annually, but growth in flat panel displays more than made up for the decline for Pixelworks. Alley acknowledged his company"s luck inOregon Business: "I absolutely believe it is sometimes better to be lucky than good. We"ve done quite well. It"s fundamentally because the markets we sell our products to are still robust." Pixelworks had grown from its five original founders to 150 employees and had revenues of $90 million.

The following year, Pixelworks put together a complete design for the electronics inside LCD and plasma televisions. When Xoceco decided to use this design as the base for its first flat-screen television, Pixelworks" engineers taught the company how it worked and how it could be modified via software. It also acquired rival Jaldi Semiconductor Corporation as part of the move toward consolidation among the manufacturers of chips used in television and computer displays.

Pixelworks finished work on a new video-processing chip, code-named Photopia, in the fall of 2003. Photopia integrated many functions onto one chip, saving space and cost. Alley took the product first to his customers in China, the fastest-growing market for the company"s fastest-growing product line. That

By 2004, consumer trends were leaning toward flat panel and high definition televisions and Pixelworks decided that its immediate future lay in high definition television. Thus, early in 2004, it partnered with byd:sign and Xoceco to introduce a complete line of flat-panel plasma and LCD televisions for sale in the United States. The plan moved Pixelworks into the position of becoming a dominant supplier of microchips for flat panel LCD televisions. In fact, 2004 revenues for the company were $176.2 million, up 25 percent from $140.9 million in 2003. However, the limited capabilities of the manufacturers LCD panels used in computers and televisions, mostly in Asia, kept prices for 30-inch LCD televisions above $1,000 and out of reach of many consumers. Not to have all of its chips in one basket, Pixelworks also began to look to the next logical extension of its technology by adding browsing capability to its products and moving into Internet appliance space.

Principal Subsidiaries: Pixelworks Japan, LLC; Pixelworks Taiwan, LLC; Panstera, Inc.; nDSP Delaware, Inc.; nDSP Corporation; Pixelworks Ltd.; Pixelworks Nova Scotia; Jaldi Semiconductor.

1998: Toshiba Corporation helps Pixelworks develop its first semiconductor for use in flat-panel monitors and high-definition televisions in exchange for assuming its manufacturing business.

SAN JOSE, Calif., Sept. 16, 2019 (GLOBE NEWSWIRE) — Pixelworks, Inc. (NASDAQ: PXLW), a leading provider of power-efficient visual processing solutions, today announced the appointment of Elias N. Nader as chief financial officer, effective September 16, 2019. Nader succeeds Steven L. Moore, who previously held the role for more than 12 years. Moore will remain engaged as a consultant to the Company through February 2020 to assist with the transition.

“Elias is a highly capable executive and a strong addition to our senior leadership team,” stated Todd DeBonis, President and CEO of Pixelworks. “In addition to his considerable financial background and a solid understanding of display technologies and end markets, he brings extensive experience in leading global organizations. Elias is joining Pixelworks at a pivotal and exciting time, as we continue to gain momentum around our mobile initiatives and drive the Company toward the next level of growth. It’s my pleasure to welcome Elias to the team, and I’m excited about the contributions he will make to the Company’s future success.”

Mr. DeBonis further commented, “I also want to take this opportunity to thank Steve for his substantial contributions and many years of dedicated service to Pixelworks. Steve has been a strong steward of the Company’s financial operations for more than a decade, and he played an important role in helping Pixelworks to reach the pivotal position it is at today. I look forward to working closely with him as we transition the CFO role to Elias, and we wish Steve the very best in his future endeavors.”

About PixelworksPixelworks provides industry-leading content creation, video delivery and display processing solutions and technology that enable highly authentic viewing experiences with superior visual quality, across all screens – from cinema to smartphone and beyond. The Company has a 20-year history of delivering image processing innovation to leading providers of consumer electronics, professional displays and video streaming services. Pixelworks is headquartered in San Jose, CA. For more information, please visit the company’s web site at www.pixelworks.com.

Watch this 90-second explainer video to learn how MEMC works, what problems it solves and the unique benefits behind the latest advancements in the technology for mobile. #smartphones#mobilephones#display#video@PCarson123@dhurkapic.twitter.com/E8KfTfhT7J— Pixelworks, Inc. (@pixelworksinc) May 8, 2020

Sr. Director Vikas Dhurka: From a capability point of view, the technologies that we provide are agnostic to the screen size and the mechanical design of the display. With the Pixelworks processor, any display could have a visual experience that is far superior than anything else that"s out there.

I think smartphone displays will get more dynamic if you"re following what"s happening in the next round of flagship 120 hertz adaptive frame rate panels - things are going to become more adaptive, not less. So, the whole idea of manually switching and selecting modes, I think, could become outdated.