NEC Electronics will soon begin mass production of a new chip that will allow cellular telephone handset makers to integrate MP3 and AAC (Advanced Audio Coding) music player functions, it said Friday.

Several telephones already play MP3 format music files, while ringtones based on MP3 files are becoming a popular feature in some markets. The NEC Electronics chip is the first that combines support for MP3 and AAC and is optimized for cellular telephone use, the company said.

The combination of the two digital music formats is possible thanks to a DSP (digital signal processor) core that handles playback of both formats and removes the need for an additional chip, NEC Electronics said. In cellular telephones, space is tight and manufacturers typically try to integrate as many functions as possible inside several main chips to cut down on space and save power.

The new chip also features DiMagic's Adaptive Surround Technology, which creates pseudo-surround sound audio.

NEC Electronics plans to begin mass production of the chip in November this year. Samples are available now and cost $15. At the same time, it will begin mass production of two lower-specification cellular telephone audio chips. The company is predicting total monthly production of all three chips will be two million units.

NEC Electronics entered the market for cellular telephone audio chips about a year ago and has produced a total of 4.3 million chips to date so the new products will mark a significant expansion of the company's business, it said.