The LC821031 converts analog video signals from CCD and contact sensors to high-quality binary image data. It includes both an 8-bit A/D converter and a 6-bit D/A converter for setting the reference potential and creates high-quality multi-valued data using a gamma conversion technique that supports arbitrary gamma curves. It also provides both black and white all-pixel distortion correction and multi-valued resolution conversion. It then applies two-dimensional filtering to this multi-valued data to separate the document image into text, photograph, and halftone areas. After converting the image to a binary image using an error diffusion technique that acquires high-quality images, it applies reduction in both the primary and secondary scan directions. Since the LC821031 limits the number of pixels processed per line to 3072 pixels, it needs no external memory to implement this processing. Thus the LC821031 implements the image processing used by facsimile, copier, and OCR products.