celestial.jpgChip maker Celestial Semiconductor is raising a $2 million venture round to fund its development of custom chips for digital TVs.

VentureBeat has learned that the Santa Clara, Calif., company has raised $1 million so far in the Series B preferred stock round.

Investors include: ComVentures Funds in Palo Alto, Calif.; Pacven Walden Ventures in San Francisco; and Alpine Venture Fund in Saratoga, Calif. Web records show that Celestial Semiconductor licensed its processor archictecture from ARM Ltd. to develop chips based on the Chinese digital TV standard, AVS.

Celestial is working on codec chip sets — video playback and encoding technology — for applications related to digital TV. Of course, the market for digital video chips is extremely competitive, with big companies such as Broadcom competing in the space.

Daniel Fu is CEO of the company, which has offices in Beijing and Santa Clara.