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This paper presents an overview of the transform and quantization designs in H.264. Unlike the popular 8×8 discrete cosine transform used in previous standards, the 4×4 transforms in H.264 can be computed exactly in integer arithmetic, thus avoiding inverse transform mismatch problems. The new transforms can also be computed without multiplications, just additions and shifts, in 16-bit arithmetic, thus minimizing computational complexity, especially for low-end processors. By using short tables, the new quantization formulas use multiplications but avoid divisions.