Sigma Announces Next Generation Decoder with Windows Media Video 9; Apex and KiSS Technology among the First to Support WMV9 Based DVD Players.

Business Editors/High-Tech Writers

2004 International CES

LAS VEGAS--(BUSINESS WIRE)--Jan. 7, 2004

Sigma Designs (Nasdaq:SIGM), a leader in digital media processing for consumer appliances, today announced the EM8620L, the next generation series of media processors that support Windows Media Video 9 (WMV9), the advanced video compression technology from Microsoft Corp. The chip also supports HighMAT (High Performance Media Access Technology), a technology jointly developed by Microsoft and Matsushita Electric Industrial to enable better performance and navigation of personal audio, video and photo CDs in next generation entertainment devices. Sigma's new EM8620L decoder chip offers a high performance architecture that supports single-chip implementations of IP video appliances, DVD players, DVD receivers and high-definition (HD) television applications. At this week's Consumer Electronics Show (CES) in Las Vegas, Sigma will showcase its EM8620L at the Microsoft eHome exhibit, and at the Sigma hospitality suite located at the Hilton Hotel.

"Sigma's innovative efforts will be at the heart of transforming the next generation of DVD players and digital media devices," said Dave Fester, general manager of the Windows Digital Media Division at Microsoft. "Their new class of chipsets take full advantage of the benefits of Windows Media Video 9 and HighMAT to enable a whole new range of experiences for consumers such as high definition video experiences and easier playback of home videos without any time consuming MPEG2 conversions."

Demand For Windows Media Video 9

There is a strong trend toward new audio and video CODECs in the entertainment industry as these companies look for innovative ways to deliver the best digital media experience to the consumer. The industry is examining technologies such as Windows Media 9 Series, which provides better compression efficiency for streaming and storing digital media content and supports full digital rights management protection, where it was previously not possible. Driven primarily by increased compression efficiency, Windows Media Video 9 is enabling network providers to offer a new range of high-quality, high-resolution video services over bandwidth-limited networks. Additionally, with both published DVD and user-created content beginning to appear, Windows Media Video 9 support looms on the horizon as the new must-have feature for enthusiasts buying DVD players. Moving into 2004 and beyond, WMV9 along with the HighMAT format represents the major unifying force for digital media shared between PC, Internet and consumer appliances.

For telco operators, WMV9 solution enables the delivery of live broadcasts and interactive services such as video-on-demand (VOD) and Internet protocol television (IPTV) over broadband networks via advanced low-cost, set-top boxes (STBs). By using Windows Media 9 Series in their deployments, operators can deliver video at a fraction of the bandwidth required using traditional MPEG-2, while also ensuring secure delivery of content using Windows Media Digital Rights Management (DRM). Using Sigma's new EM8620L silicon, telco operators can push ahead with high performance and cost-effective set-top boxes, with trial and deployment of IPTV services based on Windows Media 9 Series expected to begin early this year.

For DVD player manufacturers, Windows Media 9 Series addresses a new wave of demand that will begin with the enthusiast and continue well into the mainstream consumer market as the year unfolds. Microsoft is focused on bringing together a number of elements required to achieve rapid acceptance of Windows Media 9 Series as an important digital media standard. The new level of compression efficiency achieved by WMV9 enables HD video to be stored on current DVD media or standard definition video on CD media. This content will then benefit from the protection of Microsoft's Windows Media DRM for fixed media. Finally, DVD players will be able to read and navigate a mixture of video, audio, and image content created using the new HighMAT format, a standard established jointly by Matsushita and Microsoft.

Over time, Windows Media 9 Series will account for a substantial amount of the video and audio content available. The release of a Terminator 2 bonus DVD in Windows Media Video HD from Artisan studios in June of 2003 was the first evidence of an underlying movement to deliver a large number of titles encoded in HD. Concurrently, the amount of compelling downloadable and streaming video content is also building up rapidly, and can be accessed from Web-sites such as at CinemaNow, iFilm, Movielink, Movie Magix, netcine, SkyPerfecTV, WOWOW and BMWfilms.com. Aside from commercially available content, Windows Movie Maker 2, Microsoft's easy to use video editing feature of Windows XP, is another tool that's providing consumers with loads of home movies.

The EM8620L Media Processor

The new EM8620L media processor from Sigma Designs provides a complete single-chip solution for IP video set-top boxes, DVD receivers and DVD players. The EM8620L offers a wide range of media processing functions for video decoding, audio decoding, and graphics processing based on REALmagic(R) HD technology, for the highest quality image possible on high definition displays. For single-chip systems, it features an on-chip RISC processor, PCI-bus, IDE controller and additional peripheral ports for supporting other subsystems. Configured with standard front-end components, the EM8620L provides a full-featured solution for advanced set-top appliances. Key features of the new EM8620L chip include:

-- Video decoding of WMV9, MPEG-4, MPEG-2 and MPEG-1 streams, at

HD or multi-stream SD.

-- Audio DSP supports decoding of WMA9, WMA Pro, WMA lossless,

Dolby Digital, MP3, MPEG-1/2 (layers 1, 2, and 3) and MPEG-4

AAC.

-- Graphics processing with 2D acceleration, and 32-bit OSD.

-- Advanced display processing including, programmable linear and

non-linear scaling, 5-plane video mixer, adaptive

de-interlacing, adaptive flicker filtering and pixel-based

alpha mixing.

-- Advanced copy protection supporting Windows Media DRM, AES,

DES, triple-DES, and RC4 algorithms, as well as CSS for DVD

playback.

-- System-on-chip architecture with RISC CPU, unified memory

controller, and interfaces for PCI, IDE, SPI, IR, UART and

local bus.

-- Software support under Linux and WinCE for VOD, DVD playback,

PVR applications and HighMAT navigation.

"As the demand for more ubiquitous video along with high-definition features continues to increase, the popularity of new advanced CODECS such as Microsoft's Windows Media 9 Series will no doubt rise," said Ken Lowe, VP of strategic marketing of Sigma Designs. "At this point, we are seeing substantial momentum toward the use of Windows Media Video 9 for IP video solutions that can deliver high-quality video streaming, as well as DVD players that can accept the widening range of video formats.

Top Quality Video With REALmagic HD

REALmagic video technology presents the highest quality viewing experience to a wide range of consumer electronics products. REALmagic HD represents a proprietary technology from Sigma Designs that takes advantage of visual perception science and full precision processing to optimize the decoding, scaling and display of digital media content. REALmagic HD achieves an exceptionally accurate, film-like picture on any HD or SD television. Products displaying the certified REALmagic HD brand assure consumers of a top-quality picture on their HD or SD television, a result of more than 10 years of applied research.

Beyond its multi-CODEC decoding, the EM862x family of media processors also provides the most advanced display processing features available, which recreate many elements of cinema picture quality. The family of chips is based on a unique architectural approach to mixing multiple video and graphics sources together with arbitrary scaling and conversion. Two separate video sources plus accelerated graphics, OSD, and hardware cursor elements are scan converted, scaled, and mixed together in real time to support complex screen composition. Additionally, the chip offers composite and S-video TV outputs, interlaced or progressive analog component video outputs (YPbPr or RGB), and support for DVI output.

Industry Adoption

Several companies are preparing new IP video appliances to enter the market taking advantage of Windows Media Series 9. Of these companies, Apex Digital, Inc., a leader in consumer electronics and a major supplier of consumer digital entertainment products, including DVDs, TVs, digital still cameras and camcorders, will be demonstrating their new DVD player at CES in booth 13639 LVCC Central Hall. The Apex DVD player provides high-definition and WMV9 capabilities by utilizing Sigma's EM8620L media processor.

"Apex is a company rocketing ahead in the market based on providing consumers with exciting consumer electronic products, like DVD players," said Stephen Brothers, president, Apex Digital, Inc. "In continuing our drive towards excellence and maintaining our leadership in the electronics arena, we recognize that selecting a solution like Sigma's EM8620L is a natural necessity. Our customers depend on us to provide leading-edge products with solid reliability and performance. Our new DVD player delivers steady reliability and precise performance."

KiSS Technology, a globally leading Scandinavian manufacturer of DVD products will launch three new products at CES. These include the DVD player DP-600, DVD recorder DP-678, and a streaming device SB-020, all using the EM8620L media processor from Sigma Designs. The DVD player, DP-600 offers WMV9, progressive scan, MPEG-4, MP3 playback, advanced user interface and a photo album feature. The player is already equipped with an Ethernet 10/100 port and wireless connection. The DVD recorder, DP-678, includes a standard DVD drive, 80 GB or 120GB hard disc and integrated TV tuner. The tuner enables the consumer to easily record programs, download files from the PC to the DVD player or TV, and the Ethernet and wireless capabilities allow consumers to watch movies, view photographs, and listen to music and radio via the Internet. The SB-020 streaming device provides a wireless network connection, eliminating the need to lay wires in the home to transfer material from the PC to the streaming device. The streaming device also connects directly to the Internet and provides video-on-demand for viewing and renting movies from the Internet.

"The entertainment world is changing rapidly for the avid consumer," said Peter Christensen, CEO, KiSS Technology. "KiSS has traditionally provided its customers with the most advanced features and capabilities to provide the consumer with a seamless entertainment experience. Working with Sigma's solidly proven solutions provide us with the opportunity to raise the bar with each new product. With wireless networking and Internet capabilities -- the world of consumer devices will continue to evolve and grow."

V Inc., the multiple award-winning digital display brand plans to launch the Bravo D3 high definition DVD player with WMV9 and HighMAT formatted playback. Bravo D3 is powered with Sigma's EM8620L on-chip processor allowing the Bravo D3 to provide DVD playback via DVI output in high-resolution 480p, 1080i and 720p formats. The Bravo D3 will also include DVD-R/RW, DVD+R/RW, CD, CD-R/RW playback. The Bravo D3 is one of the first DVD players capable of playing MPEG2, MPEG4 and WMV9 in high definition. Audio decoding includes WMA9, WMA Pro, WMA lossless, Dolby Digital, MP3, MPEG-1/2 (layers 1, 2, and 3) and MPEG-4 AAC. The player supports Dolby Digital and DTS(R) multi-channel channel audio pass-through on Toslink optical and S/PDIF coaxial digital outputs. The player features NTSC/PAL output in composite and S-Video formats with interlaced or progressive component video output in 480i, 480p, 1080i, 720p and user-definable linear and non-linear resolutions.

"The burgeoning world of digital entertainment, specifically high definition, is on its way to deliver exciting audio and visual experiences to each living room," said William Wang, CEO, V Inc. "V Inc. is a company that continues to break barriers and succeed in providing award-winning solutions for consumers. Our new Bravo D3 DVD player matches our mission of innovation and utilizes Sigma's advanced technological leadership with the EM8620L."

Availability

The EM8620L media processors will be sold through Sigma's direct sales force. Samples will be available in March with production scheduled for May.

Safe Harbor Statement

This press release may contain forward-looking statements, including statements about the projected timing and extent of customer shipments as well as the expected use of Sigma's MPEG decoder products. Actual results could vary from those projected in the forward looking statements as a result of various factors, including worldwide economic conditions, changes in the customer's ability or desire to complete the roll-out, consumer reaction to the new products and services being offered, the ability of Sigma to deliver sufficient quantity and quality of MPEG decoder chips, prices for the Sigma chips, alternative offerings by competitors, and the ability of the parties to work together successfully to achieve the rollout.

About Sigma Designs, Inc.

Sigma Designs (Nasdaq:SIGM) specializes in silicon-based MPEG decoding for streaming video, progressive DVD playback, and advanced digital set-top boxes. The company's award-winning REALmagic(R) Video Streaming Technology is used in both commercial and consumer applications providing highly integrated solutions for high-quality decoding of MPEG-1, MPEG-2 and MPEG-4. Headquartered in Milpitas, Calif., the company also has sales offices in China, Europe, Hong Kong, Japan, Korea and Taiwan. For more information, please visit the company's web site at www.sigmadesigns.com/.

REALmagic and Sigma Designs are registered trademarks of Sigma Designs. All other products and companies referred to herein are trademarks or registered trademarks of their respective companies.