Amid a drop in television demand, the global market for digital television (DTV) semiconductors declined by nearly 6 per cent last year, according to a report from information and analytics provider IHS.
Total DTV semiconductor revenue fell to $14.09 billion last year, down from $14.91 billion in 2011, as presented in the attached figure. While revenue for chips used on TV motherboards actually rose during the year, revenue sagged in three other DTV segments: power management, light-emitting diode (LED) backlighting and flat-panel TV driver integrated circuits. Better prospects are in store this year when revenue rebounds to $14.35 billion.
“Much of the cause for the decline in DTV semiconductor revenue last year was tied to a conspicuous deceleration of the worldwide TV market, with demand slowing in the West—and a steep drop-off in Japan,” said Brian O’Rourke, senior principal analyst for display electronics at IHS. “Overall TV production decreased last year in the face of a soft global economy. Individual regions including Asia-Pacific, North America, Europe, China, Japan, and the Middle East-Africa all experienced reductions in the number of TVs they manufactured.”
Alongside the drop in TV production, global TV shipments also dipped in 2012 as growth stalled in the LCD television market.
The fall in TV shipments was particularly severe in Japan following the expiration last year of consumer subsidies handed out by the government intended to encourage the purchase of TV sets. TV shipments to the country nosedived to 7.5 million units in 2012, down a massive 62 percent from 19.8 million units in 2011.
In the TV video processor segment of the DTV market, Taiwanese chip suppliers MStar Semiconductor and MediaTek continued to dominate, accounting for about two-thirds of all TV video processor revenue during the first three quarters of 2012. A proposed merger of the two players, likely to be finalised in the first half this year, will create an even more formidable presence in the DTV semiconductor market, resulting in a single giant entity that would further ensure the primacy of Taiwan.
While MStar and MediaTek supply the low and midrange TV market, higher-end TV models are addressed by the semiconductor divisions of the brands that make higher-end TV sets. Here, top TV makers such as Samsung Electronics, LG Electronics and Sony tend to go with their own TV processor designs.
Between what the Taiwanese have already captured and the market cornered by higher-end TV brands, little available ground remains for any potential new entrants to the DTV chip market. Nonetheless, intrepid suppliers such as Qualcomm, Marvell and Sigma Designs – all US – based entities—are looking to expand their share in the volatile, rapidly evolving market.
Qualcomm, for instance, continues to target design wins for its Snapdragon processor line, which has already found its way into a Lenovo DTV available in China. For its part, Marvell has gained wins with the Armada 1500 dual-core processor in Chinese-made set-top-box units for the local Hisense and TCL brands. Meanwhile, Sigma Designs announced that its HiDTV pro chipset has achieved a design win in the Cinemawide RazorLED Smart TV of California-based Vizio, after purchasing the DTV product portfolio of Trident Microsystems out of bankruptcy in May last year.
Still, the relatively scant number of design wins for these leading chip suppliers shows the narrow share of the TV market that is currently available.