Sigma Launches The First All-Format Media Processor Offering High Definition Support For H.264, WMV9/VC-1, and MPEG-2.

LAS VEGAS -- New SMP8630 Series Targets IPTV, High Definition DVD and Other Consumer Products

Sigma Designs (Nasdaq:SIGM), a leader in digital media processing for consumer appliances, today announced the SMP8630 series of secure media processors, representing the industry's first chipsets to integrate support of high-definition (HD) decoding in all major formats including H.264, WMV9/VC1 and MPEG-2. The new SMP8630 series of chipsets will be offered in two configurations and will provide comprehensive content security measures with extensive digital rights management (DRM) support. At this week's Consumer Electronics Show (CES) in Las Vegas, Sigma will showcase its SMP8630 series at the Sigma hospitality suite located at the Hilton Hotel.

"Simply stated, the SMP8630 series is the most significant product Sigma has ever introduced," said Ken Lowe, VP of strategic marketing. "Addressing the market requirements for IPTV set-tops, HD-DVD players, and other applications, this chip provides a no compromise solution with high definition decoding, supporting all major audio/video codecs, and a robust content security system. Furthermore, this is a fully integrated system-on-chip (SOC) solution with a 300 MHz MIPS CPU, peripherals, and the most mature embedded software suite available for streaming video applications."

Next Generation Consumer Products Embrace Advanced Codecs and High Definition

The increasing pervasiveness of digital media coupled with a fundamental need for entertainment alternatives are paving the way for explosive growth in new types of consumer products and services. Telcos around the world are preparing to launch premium video services, DVD is moving to high definition, homes are using wireless networks to access media anywhere, and portable players are just about to experience video on-the-go. The common denominator: advanced compression technologies and high performance media processors turning these concepts into commercial realities.

Driving this movement is a transition from the digital media monopoly, held by MPEG-2 for the past 10 years, yielding to a duopoly shared by two new video codecs that provide over twice the compression efficiency: VC-1, a SMPTE specification based on Microsoft's Windows Media Video 9 (WMV9); and H.264, a shared specification from ITU and MPEG associations, also known as AVC, and MPEG-4 part 10. Moving forward, VC-1 and H.264 appear destined to equally share the role as the next generation digital media standard.

The IPTV industry, which is just now showing signs of impending growth on a worldwide basis, is rapidly moving toward advanced set-top boxes that feature both WMV9 and H.264. For telco operators, these advanced codec solutions enable the delivery of high quality video services, such as live broadcasts and video-on-demand (VOD) over bandwidth limited broadband networks. To upscale competition, certain North American and Asian services are looking to use the added compression to feature high-definition channels. By deploying set-top boxes that incorporate all codecs, operators ensure that their investment in customer premise equipment can support future content streams in any major format.

For future DVD players, the movement toward high-definition content using WMV9 and H.264 with continued support for MPEG-2 is a near certainty as both HD-DVD and Blu-ray camps have selected these new codec standards. For some time, advanced DVD players featuring MPEG-4 content, high-definition output, and network connectivity have been popular with entertainment enthusiasts. However, the enormous momentum behind the emergence of HD-DVD and Blu-ray players will usher this level of performance into the mainstream and bring with it a tidal wave of content that requires multi-format support. Meanwhile, two fast-moving initiatives for high definition playback based on red-laser technology and the WMV9 codec are expanding current demand: Windows Media DVD players are now being purchased to take advantage of new published and online content; and Taiwan-driven FVD format players (forward versatile disc) are targeting Asian originated movie content for the huge domestic market in China, Taiwan and elsewhere.

Moving into the future, many other digital media products are adopting one or all of these new video codecs. Digital media receivers (DMRs) provide seamless flow of video content to TV sets throughout the home, and offer access to the growing collections of PC-based, digital photos, music and video, much of which is now based on WMV9 and WMA. Likewise, HDTV televisions are moving to support the widening range of broadcast standards, including the migration of both DVB, ARIB and ATSC to high-definition, H.264 content. Moving down the road, new portable media players sporting video playback are adding WMV9 compression to more than double their video storage capacity, as well as tap into the growing list of downloadable content.

High Definition Decoding In All-Formats

Sigma's SMP8630 series represents a groundbreaking achievement for the media processor industry, establishing the first silicon to feature multi-stream decoding, with all major codecs, operating at high definition. Key media processing features include:

--Video decoding up to high definition (1920x1080, p30) for VC-1 (WMV9), H.264, MPEG-2 and MPEG-4.

--Graphics acceleration with 32-bit alpha-blending, raster operations, and line drawing functions, with peak rates up to 200 Mpixels/sec.

--Multi-stream decoding for picture-in-picture window operations, in any format, up to the maximum operating rate of the chipset.

--Audio decoding capability for Dolby Digital, WMA, WMA Pro, MPEG, AAC, MP3, DVD Audio and MPEG 1 or 2, layers I, II and III.

The series is comprised of two chipsets to match specific application requirements: The SMP8630 is targeted at single-stream HD or multi-stream, standard definition (SD) applications and the SMP8634 is targeted at multi-stream HD applications. Using a flexible display processing engine with high-quality adaptive scaling, the SMP8630 series enables graphics blending with multiple video windows for a wide range of display modes. The chipset also provides motion adaptive deinterlacing for flat-panel, digital television output as well as NTSC/PAL encoded video output for standard analog televisions.

Introducing Secure Media Processing

As studios and content providers begin to roll out high-definition digital content with near-theatre level quality, a substantially greater level of security measures will be required for protection and digital rights management (DRM). Addressing this requirement, Sigma's SMP8630 series has been designed to provide airtight security measures to circumvent any common form of player-based piracy. Key security features include:

--Dedicated security system CPU, inaccessible to external interfaces, for managing authentication, key generation and content access functions.

--Secure boot ROM, embedded Flash, and data-path encryption for guarding all DRM code and payload streams passing to and from the chip.

--Hardware cryptography engines for high speed payload decryption including AES, DES, triple-DES, RC4, CSS, DVB-CSA and Multi-2.

Using the SMP8630 content security system, every digital media product would power-on with a secure boot operation to authenticate the system code, pass application control to the main CPU, encrypt all code and data coming to and from the chip, and use the secure CPU (which operates behind a hardware firewall) to authenticate keys and control content flow through the chosen decryption engines. These measures in total represent an airtight security system designed to thwart most types of system attacks and attempts at piracy.

Delivering A Single-chip Solution

The SMP8630 series of media processors provide a complete single-chip solution and features an on-chip CPU, system peripherals and embedded software. For system control and embedded applications, each chip features a MIPS CPU operating at 300 MHz with 32K of instruction and data cache respectively. A unified memory interface is used for both CPU and media processing functions, supporting up to 512MB of DDR (double data rate) SDRAM memory operating at 200 MHz. For enhancing system integration, the SMP8630 series offers several external interfaces, including a PCI bus, IDE controller, Ethernet MAC controller and other general purpose I/O ports.

To ensure quick time-to-market and engineering convenience, Sigma will be provided a library of streaming video and media playback software, implemented under both Linux and WinCE. Both Linux and WinCE operating systems will be ported to the SMP8630 architecture, and will execute instructions via the on-chip MIPS CPU. Sigma's library of embedded software includes a real-time streaming engine for IP-based video-on-demand applications, a DVD navigation module for playback from various forms of stored media, a network stack, and a hardware abstraction layer for low-level program control.

Sigma Designs -- Powering The Digital Media Generation

For more than five years, Sigma Designs has been investing in the development of advanced high-definition codecs to drive the expansion of the digital media, consumer market. The new SMP8630 series, with its multi-format high-definition decoding, marks the fourth year in a row that Sigma Designs has set a demonstrable milestone for the media processor industry at the Consumer Electronics Show:

--CES 2002 witnessed the first MPEG-4 decoder for consumer set-top products.

--CES 2003 witnessed the first high-definition decoder for both MPEG-2 and MPEG-4.

--CES 2004 witnessed the first high-definition WMV9 decoder for consumer products.

--CES 2005 witnessed the first high-definition decoder with H.264, WMV9/VC1 and MPEG-2.

Based on its media processors and streaming software technologies, Sigma has established a leadership position in single-chip solutions for IPTV set-top boxes, digital media receivers and networked DVD players. Taking advantage of this technology, consumer products are being distributed on a worldwide basis by such leading manufacturers as Denon, D-Link, Fujitsu-Siemens, I-O Data, Kenwood, KiSS Technology, LG Electronics, Lite-ON IT, Onkyo, Samsung, Sony and many others.

Availability

The SMP8630 series of media processors will be sold through Sigma's direct sales force. Samples of the SMP8630 will be available in March. Samples of the SMP8634 will be available in April. Production availability will begin at mid-year.

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 media processors for IPTV set-top boxes, digital media receivers, high definition DVD players, HDTV, and portable media players. The company's award-winning REALmagic(R) Video Streaming Technology is used in a variety of consumer applications providing highly integrated solutions for high-quality decoding of H.264, WMV9, MPEG-4, MPEG-2 and MPEG-1. 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.