Digital Television Semiconductors Post a Down Q1

05 August 2013

The market for television semiconductors fell in the first quarter compared to the same time a year ago, a weak start to a year in which overall revenue is projected to finish lower than in 2012, according to the latest Digital TV and Set-Top Box Semiconductor report from information and analytics provider IHS.

Global revenue for digital TV semiconductors amounted to $2.55 billion during the January to March period, down 3 percent from the $2.63 billion posted in the same three-month period of the first quarter of 2012. The new figure is so far the lowest of the last five quarters.

In all, the revenue represented takings from four major segments in which integrated circuits (IC) are used in various components of the TV. The segments include the main board for digital televisions; power; light-emitting-diode (LED) backlighting; flat-panel-TV driver ICs; and a collective group representing ICs used in components like the TV's remote control and the television's infrared sensor.

Overall revenue for the DTV semiconductor industry this year is forecast to be lower than in 2012, a casualty of the generally declining TV business worldwide. After years of furious growth, TV markets everywhere are slowing. By now possessing at least one liquid-crystal display or plasma television set, consumers in many parts of the world no longer feel the need to upgrade-unlike when digital TVs first appeared and proved superior to the bulky analog televisions that ruled at that time, furnishing a compelling reason to purchase. 

Future growth to come from higher-end TVs

Despite the lower revenue in the first quarter and the projected dip overall for industry takings by year-end, many bright spots remain for the DTV semiconductor industry, IHS believes.

For one, the continuing transition from analog to digital TV sets in developing markets will result in more semiconductor content per TV set. The more chip content there is to be produced, the greater the opportunity for DTV chip makers there will be to keep revenue growing, countering the decline in specific segments that are now maturing, such as display driver ICs and LED backlighting.

Another cause for optimism is the transition in the more developed markets to Smart, or Internet-connected, TVs.  The interactive sets require not just a larger quantity of semiconductor content-such as for memory and connectivity-but also more expensive semiconductors, including sophisticated TV system-on-chips (SoC) that package many electronic components into a single integrated circuit.

A third driver will be the transition in viewing to ultra-high-definition and organic light-emitting-diode (OLED) sets. Here, an increasing move toward adopting the advanced sets-especially as their prices come down-will help continue to drive the TV semiconductor market in the outer years of the forecast period.  

Giants dominate the markets

The biggest players in the DTV semiconductor space are down to two giants, MediaTek and MStar, both from Taiwan. In August, however, a merger between the two is expected to become official, creating an even larger entity that will command two-thirds of revenue for the worldwide TV SoC market. The newly merged behemoth will dwarf other players, many of them also based in Taiwan, including the likes of Realtek, Novatek and Sunplus.

An important new player to the scene is Qualcomm of San Diego, Calif., a major global producer of wireless telecommunications products and services. The company recently released its first dedicated TV SoC solution, the MPQ8064, and has become a significant competitor to the space. Qualcomm was the No. 3 semiconductor vendor worldwide in 2012, and was also the top fabless vendor outsourcing its chip products to semiconductor foundries.

In the related market for set-top-box (STB) processors, the industry also saw a tossup between two players, Broadcom from Irvine in California; and French-Italian maker STMicroelectronics. Each enjoyed double-digit growth last year over 2011, and their aggregate share of the STB processor market reached more than 80 percent.

A new entrant to this segment is chipmaker Intel, which hopes to supply STB processors for high-end media servers and residential gateway boxes. 

Read more>> TV semiconductor outlook is mixed in 2013 

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