Although AITech was founded ten years ago, the microelectronics division was just established last year. AITech develops PC-to-TV video scan conversion technology in ICs, external peripherals, and internal board-level products for use in desktop and portable video, imaging and multimedia applications. The company has 100 employees and revenues of greater than $2 million/month. AItech anticipates an IPO in the near future.

Scan conversion changes a PC's non-interlaced VGA RGB output to a TV-compatible NTSC or PAL format. For the past few years this technology has been used primarily to enable business presentations over large-format TVs. However, now we are witnessing the convergence of PC and TV technology. Web browsing and game playing on TVs are increasingly common. Web-TV, although implemented poorly, is a prime example of this convergence.

AITech is the dominant supplier of scan conversion products and has a well-established brand name in the retail channel. VSPro is its patented video digital signal processing technology used in the AIT1108, AIT1168 and AIT2108 ICs. The ICs (used in AITech's retail products) integrate ADCs, color space conversion, digital filtering, PLLs, video encoding and DACs on a single chip. Its "Flic Free" filter technology eliminates flicker, a common artifact of PC to TV scan conversion. The AIT1108 is an entry-level product featuring 24-bit 640x480 resolution. The AIT1168 is a superset of the 1108 and adds hardware scaling of 800x600 images and overscan/underscan support. TV resolution is approx. 525x485 so a 640x480 VGA source image needs to be scaled to fit it into the TV's viewable area. Inferior solutions may lose the upper and lower portions of the image. The AIT2108 is also a superset of the 1108 and adds multi-sync, zoom, pan, freeze and scaling capabilities. The device uses an external field memory to enable the use of VGA refresh rates that are not synchronized with TV refresh rates.

AITech recently introduced a wireless scan-converter/keyboard that allows the PC to be up to 100 feet from the TV. The company also has a line of retail video-capture products and we anticipate that several of these might become chip level products in the future. A Micron transport notebook PC uses an AIT chip for TV output. JVC will be introducing a TV with VGA inputs that also uses an AIT chip.

We initially believed that scan conversion would be naturally integrated into GUI controllers, however the technology appears to be more complex then we thought. Several of the GUIs that do integrate the technology do so with limited success. With the emergence of PC-ready TVs, the question remains as to where the integration should take place - the TV or the PC? Intel has intentionally decided to leave scan conversion out of its AGP GUI devices. Beside PC-to-TV converters, other potential applications include internet set-top boxes, web PCs, NCs and PC-ready TVs. AITech had some chip sales in Taiwan and Japan prior to the formation of its IC division, however now it is making a concerted effort to grow its IC sales. It is establishing its US rep. network now and is just starting to build its European rep. network. While Chrontel and Averlogic have competing devices, neither company has AITech's dominant market position, brand recognition or breadth of product. AITech's foundry partner is TSMC.

Dr. Michael Chen, Chairman, Founder & CEO
Ms. Jennifer H. Wang, VP of Corporate Resources, CFO
Philip C. Chen - VP of Corporate Development, Marketing and Sales