Silicon Image (Nasdaq: SIMG) is a hot commodity today. The chip designer's share price is soaring 29% above last night's closing price, thanks to a stellar second-quarter earnings report. This stock hasn't seen prices of this caliber since the early days of 2009.

Riding a global tsunami of digital TV installations, Silicon Image reported 30% stronger sales year over year, or $44.6 million. Around $2 million of that trickled down to the bottom line, turning the year-ago period's $0.06 non-GAAP loss per share into $0.03 of earnings per share. 

That was about as expected as the Spanish Inquisition: The Wall Street consensus had pointed to a $0.03 loss per share. The fact that Silicon Image is a minnow swimming with plenty of big boys only serves to magnify these extreme swings on unexpected news.

In addition to increasing high-definition TV sales worldwide -- where Silicon Image takes at least a royalty cut from the included HDMI ports, even if its own chips are nowhere to be found -- smartphones present a new growth vector for the company. The HTC EVO 4G phone ships with an HDMI connector, and Sprint Nextel (NYSE: S) brags about it in TV commercials. Motorola (NYSE: MOT) slapped HDMI hardware into the Droid X phone. More are on the way, though Silicon Image's management seems strangely reticent to even discuss the market. I find that weird.

CEO Camillo Martino is wise to the fact that Intel (Nasdaq: INTC), Sony (NYSE: SNE), Samsung, and legions of other industry giants are working to replace the HDMI standard from which Silicon Image makes a living. High-definition video displays need much more bandwidth than older standards can accommodate, but Martino believes the digital-rights management features of HDMI will keep it relevant for many years to come.

Me, I'm not so sure. DRM technologies such as the supposedly attractive features of HDMI have this irritating tendency to inconvenience honest customers more than they bother eyepatch-wearing pirates. I told you last month that HDMI has too many technical limitations, and it had better enjoy the very nadir of its market importance, which will occur any day now. The fact that Silicon Image, which is a key ingredient in the HDMI soup, sees selling points where I see a stumbling block only reinforces my grim diagnosis.

Enjoy the good times while they last, Mr. Martino. Too bad it's such a short ride.