In this paper, we will discuss further on our previous works [1] on developing a recognition chip of Jawi characters using Chain Code Algorithm and problems occurred. An explanation of Jawi characters have been made in [1]. We will also discuss our second approach i.e using discrete wavelet transform (DWT) to extract coefficients from the characters based on their features and using these coefficients to develop a unique code. This unique code will be used to recognize it. Hardware model entities integration is presented in the last section. Paper orientation will be like this. First we will discuss on why we choose DWT & way of implement it and followed by the problems we faced in using chain code algorithm. The full implementation of the design will be explained in the last section, followed by a conclusion .