Stretch is announcing today a new generation of chips for surveillance cameras, digital video recorders, machine vision and mobile cameras.

The Sunnyvale, Calif.-based company specializes in making hybrid chips, which are focused on video processing applications and yet are flexible enough to handle a wide variety of tasks. The company’s processors sit alongside image processors such as those made by Pixim. Stretch’s chips compress data so that it can be transferred more easily over data transmission lines. Better compression also reduces storage costs.

Security cameras have been a good market so far, but the company is moving beyond them, said Bob Bleachler, vice president of marketing, operations and systems design,  in an interview.

“Our processors can be applied to many other areas of embedded computing,” Bleachler said.

The new chip family is called the S7000, and it is the third design in the company’s history of making software-configurable processors, which means the processor design can be changed through software updates. The configurability allows a chip to adapt itself to the processing task at hand. Previous versions debuted in 2005 and 2007.

The ARM-based processors can encode multiple streams of high-profile H.264 video at the same time. It can process 16 channels of standard definition at once as well. These new processors could be used in internet-based security cameras, hybrid digital video recorders, and video playback devices. The three different chips in the family are built with a 65-nanometer manufacturing process and are designed for low power consumption. The chips will be available for customers in sample quantities next month.

To date, the company has raised $126 million. Investors include Worldview Technology Partners, Oak Investment Partners, and Menlo Ventures. The company has 65 employees and was founded in 2002.

Competitors include Fulhan, Soft Logic, Texas Instruments, Cavium Networks, and Mobilygen, which was acquired by Maxim. Stretch’s customers and partners are listed here.