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A low complexity fast mode decision algorithm for H.264/AVC intra prediction that uses discrete cross differences (DCD) to reduce the unlikely candidate modes in the RDO calculation is proposed. By using horizontal and vertical differences in different locations, the directions of the edges can be precisely detected. Experimental results show that the proposed fast mode decision algorithm reduces the encoding time by about 56%, with negligible loss of video quality. To realize the proposed algorithm, a VLSI design, which is comprised of a cross difference unit and direction detection unit, is implemented for the mode pre-selection stage of intra prediction. The design is synthesized using UMC 0.18 mum CMOS technology and simulated with Verilog-XL. The operating frequency of the synthesized core can exceed 50 MHz.