Zoran Corporation

Zoran Corporation

Company type	Public
Industry	Semiconductor, Consumer electronics
Founded	1981
Founder	Yuval Almog, Dr. Levy Gerzberg
Headquarters	Silicon Valley , United States
Area served	Worldwide
Products	SoC integrated circuits, multimedia chips, DVD player chips, digital camera processors, LCD TV chips, digital TV set-top box chips, printer and imaging chips
Number of employees	Not specified
Parent	CSR plc (after 2011 merger)

Zoran Corporation was an international digital technology firm established in 1981, with its headquarters located in Silicon Valley. The company specialized in the development and marketing of SoC (System on a Chip) integrated circuits tailored for consumer electronic devices. The term Zoran is derived from the Hebrew word meaning silicon. Although incorporated in Delaware, Zoran operated globally, maintaining a strong research and development presence supported by incentives from Israel's Ministry of Industry and Trade.

Originally, Zoran concentrated on filter and signal processing solutions for military, industrial, and medical sectors. However, by the late 1990s, the company transitioned its focus toward data compression technologies designed for multimedia applications. It gained prominence through its Motion JPEG codec chips, which were widely implemented in PC video capture and editing hardware. Following the year 2000, Zoran expanded its market share as a principal supplier of chips for DVD players during the peak production period extending to around 2007. Beginning in 2005, the company provided semiconductor components for a substantial portion of worldwide digital camera manufacturing. By 2008–2009, Zoran offered competitively priced integrated circuits for LCD televisions compatible with US HDTV broadcast standards.

In 2011, Zoran merged with UK-based CSR, continuing operations under the CSR brand and stock listings. Subsequent to the merger, CSR undertook significant workforce reductions affecting former Zoran personnel.

Provider of signal processing integrated circuits

Founded in 1981 by Yuval Almog and Dr. Levy Gerzberg, Zoran initially focused on DSP technologies.

Interestingly, the villain "Max Zorin" and "Zorin Industries" featured in the James Bond film A View to a Kill coincidentally bore a name similar to Zoran Corporation. The film studio was unaware of the company's existence during production and agreed to include a disclaimer stating no affiliation with Zoran or the semiconductor industry.

Up until 1991, Zoran's primary income was generated from digital filter and vector signal processors utilized within military, industrial, and medical applications. In 1989, the company redirected its efforts toward data compression products targeting emerging multimedia markets, discontinuing its earlier DSP product lines.

Multimedia chip supplier with DVD player market prominence

Zoran earned recognition through its PC video products employing Motion JPEG technology, which significantly contributed to revenue streams until 2001. Its chip models such as the ZR3606x and USB-enabled ZR3650x were extensively adopted in PC video capture and editing devices. Additionally, Zoran developed digital audio processors like the ZR38601 aimed at PC and home theater digital speaker markets and licensed intellectual property cores for decoding and encoding NTSC, PAL, and SECAM television signals.

In 1997, Zoran expanded by acquiring CompCore Multimedia, a company specializing in software-based compression solutions and intellectual property cores for video and audio decoder integrated circuits.

From 1997 onward, Zoran established itself as a leading provider of MPEG-2 technology utilized in DVD and Super Video CD applications. Although it did not capitalize on early revenues from MPEG-decoding chips amid the late-1990s Video CD boom in China—which was based on MPEG-1 technology—the surge in DVD player chip sales drove significant revenue growth. Starting in 2001, chips for DVD players represented the dominant portion of Zoran’s product revenue.

Expansion of market presence and diversification through acquisitions; pivotal shift in DVD segment

In October 2000, Zoran acquired Nogatech, Inc., a producer of integrated circuits that link video devices with computers, by issuing Zoran common stock valued at $154 million.

Three years later, in 2003, Zoran expanded its offerings by purchasing Oak Technology for $358 million. This acquisition broadened its product range to include chips originally developed by TeraLogic for digital televisions, along with chips and software designed for inkjet printing, laser printing, multi-function printers, and industrial imaging systems. Additionally, Zoran obtained intellectual property related to optical storage technologies aimed at developing DVD recorder chips.

Sales of DVD-related chips reached their zenith in the second quarter of 2004 but subsequently experienced a steep decline following a significant inventory adjustment in China. By 2010, revenue from DVD products had diminished to just 8%, primarily due to decreasing average selling prices, market commoditization, and competition from low-cost manufacturers.

Expansion in non-DVD segments (COACH)

By 2005, the COACH line—focused on digital camera processors that utilized Zoran’s expertise in JPEG technology—emerged as a principal revenue source and eventually became the company’s largest segment. Meanwhile, the printer and imaging division inherited from Oak consistently contributed approximately 20% of total revenues.

In pursuit of the mobile phone market, Zoran acquired Israeli firm Emblaze Semiconductor in 2004 for $54 million. This acquisition led to the development of a multimedia processor product line which saw limited success supplying LG camera phones in 2008 but was discontinued by the third quarter of 2009 due to insufficient sustained growth.

Zoran’s revenues peaked at $507 million in 2007 with a non-GAAP net income of $71 million but then declined to $439 million in revenue and $8 million net income in 2008.

The digital television (DTV) product line, targeting flat-panel TVs and set-top boxes, became an important revenue contributor—accounting for 35% of sales in the third quarter of 2008 and increasing to 40% by mid-2009. This growth was largely driven by Zoran’s strong position in the low- to mid-range LCD TV market in the United States, which helped mitigate expected downturn effects during 2009.

Decline during final independent years

In 2009, Zoran’s revenue dropped to $380 million from $439 million the year before, alongside a non-GAAP net loss of $13 million. Although TV-related revenues increased by 40%, reflecting expanded DTV market share in the US reaching 30%, by the second quarter of 2010 the DTV segment encountered difficulties resulting in a significantly downgraded outlook. Heightened competition and commoditization impacted both the DTV and digital camera chip markets, mirroring earlier challenges faced by Zoran’s DVD chip business, which led to reduced average selling prices and compressed profit margins.

Zoran’s final acquisition occurred in 2010 with the purchase of silicon RF tuner specialist Microtune Inc. for roughly $166 million. Microtune’s products catered to cable set-top boxes, broadband cable modems, digital television, and automotive entertainment systems.

For fiscal year 2010, Zoran reported a non-GAAP net loss of $21.5 million on revenues totaling $357 million, including a $15 million loss in Q4 alone. Despite Microtune contributing an estimated quarterly revenue run-rate of $24 million by the second quarter of 2010, first-quarter revenues for 2011 fell to $85 million with a non-GAAP net loss of $21 million. The outlook for the digital camera segment was revised downward following Cisco’s withdrawal from the video camcorder market. During the second quarter of 2011—the company’s final quarter as an independent entity—revenues declined further to $83 million accompanied by an $18 million non-GAAP net loss; however, management projected seasonal revenue growth reaching between $100 million and $105 million for Q3 2011.

CSR plc merger

On 21 February 2011, Zoran revealed plans to merge with CSR, a UK-based pioneer in wireless connectivity technologies such as WLAN, Bluetooth, and location-based chips including GPS. At that time, Zoran's board was under pressure from hedge fund Ramius LLC, which argued that Zoran’s stock was undervalued. Facing a deteriorating business outlook, CSR lowered its initial all-stock offer from $679 million to approximately $484 million in June, incorporating a substantial cash element. The merger finalized on 31 August 2011, with Zoran continuing operations under the CSR brand. While Zoran framed the transaction as a merger, CSR executives regarded it as an acquisition.

Following the merger, CSR implemented significant workforce reductions among former Zoran staff. By the end of 2011, the DTV and silicon tuner divisions were shut down, resulting in 800 job cuts and reportedly contributing to an increase in CSR’s share value. By late 2012, only the COACH (camera-on-a-chip) and Quatro (printer/imaging) product lines persisted. In December 2013, CSR ceased development of the COACH platform and laid off about 200 employees. Mid-2014 saw CSR divest the COACH technology and related camera/video intellectual property to Qualcomm. Eventually, Qualcomm acquired CSR.

Products

Zoran specialized in designing semiconductor chips for both consumer and professional electronics applications involving image compression and video compression, including PC-based video capture and editing products, DVD players and recorders, LCD TVs, digital cameras, security cameras, digital TV set-top boxes, printers, and mobile devices.

As a fabless semiconductor company, Zoran relied on foundries such as TSMC for chip fabrication. In addition to silicon chips, Zoran supplied customers with comprehensive reference designs—comprising printed circuit board schematics, bills of materials, firmware, and software development tools—facilitating accelerated product launches while minimizing investment costs and technical risks.

Prominent product families included Vaddis, extensively utilized in DVD players featuring HDMI output through the HDXtreme upscaler; COACH, a video/image processing platform for digital cameras adopted by leading global brands and Asian manufacturers with shipments reaching hundreds of millions of units; and SupraHD, integrated system-on-chip solutions for LCD televisions supporting US ATSC and NTSC broadcast standards.

Additional market segments addressed involved digital TV set-top boxes across Asia, US analog-to-digital converter boxes, DVD recorders powered by the Activa MPEG-2 encoding series, and high-performance camera phones equipped with APPROACH multimedia processors.

Major clients deploying Zoran technology included top-tier brands: DVD players from Samsung, LG, Sharp, and Toshiba; digital cameras by Casio, Kodak, Nikon, Olympus, Pentax, Samsung, and Sony; LG Viewty camera phones utilizing APPROACH processors; entry-level LCD TVs sold in the US under Insignia, Magnavox, Vizio, and Westinghouse brands employing SupraHD DTV processors; as well as printers from Canon, Epson, HP, Lexmark, and Samsung incorporating SoCs alongside licensed software solutions.

External links

• http://www.csr.com – Official website of CSR plc, the firm that purchased Zoran in 2011