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updated 8/16/2004 4:04:37 PM ET 2004-08-16T20:04:37

Intel has scrapped the launch of an ambitious technology it once claimed would halve the cost of large-screen televisions before the end of this year.

The initiative was central to the chipmaker's efforts to catch up with and eventually leapfrog rival Texas Instruments in making the core components for large-scale projection televisions.

While the immediate plans have been put on ice, Intel said that it was still committed to using the technology and believed it would become important in the consumer electronics business. The screens would be competitors to LCD flat screens, the current darling of the technology sector, which is being boosted by billions of dollars of investment by US and Asian manufacturers.

The aborted launch of the TV technology is the latest mis-step to dent Intel's reputation for engineering prowess and has raised questions about its strategy in a number of specialized chip markets.

The chipmaker made waves in the consumer electronics sector when it trumpeted the potential of the new TV technology at the annual Consumer Electronics Show in Las Vegas in January.

Speaking at the time, Paul Otellini, Intel's president, predicted: "This will change large-screen television economics."

The technology, known as liquid crystal on silicon, or LCOS, involves mounting a thin layer of liquid crystal silicon on a number of transistors. The device acts like a mirror, bouncing back light directed at it and using the transistors to manipulate the reflected light into an image.

David Mentley, an analyst at Stanford Resources, said the effort of combining both traditional chipmaking and optical technologies on a single device had made LCOS a difficult technology to master and had led to disappointments from a number of chip companies. Intel said that it had decided to hold back from launching the technology until it could be sure that it would produce "clear product differentiation" from rival technologies.

Mentley said that Texas Instruments had stolen a lead in the large-screen TV business with chips known as digital light processors. Along with a separate technology used by Sony known as polysilicon transmission displays DLPs had established a strong position in the projection TV market.

That made it difficult for LCOS to break in until it could demonstrate a clear product advantage at a lower cost. For big screen televisions of 36 inch or larger, flat screen sets already outsell conventional cathode ray tube sets.

LCD panels made by manufacturers including Sharp, Samsung and LG-Philips are also expected to fall in price as production is increased.

© The Financial Times Ltd 2013. "FT" and "Financial Times" are trademarks of the Financial Times.

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