News
EL SEGUNDO, CA – Despite booming sales of digital televisions and the looming digital broadcast switchover in the US and elsewhere, DTV semiconductor industry revenue actually declined in 2008, as the overall woes of the broader economy cut consumer demand, limiting total shipments and revenues for the year, says iSuppli Corp.
Global DTV semiconductor revenue is set to decline to $7.95 billion in 2008, down 1.1% year-over-year, says the research firm.
“The decline in revenue comes as somewhat of a shock to a DTV semiconductor market that had seen strong growth and even stronger growth prospects all the way up to the first half of 2008,” said Randy Lawson, senior analyst for digital television and display electronics at iSuppli.
“The DTV semiconductor market in recent years had enjoyed robust year-on-year revenue growth due to the rapid transition to newer television display technologies and the arrival of increasingly feature-rich sets that sport higher resolutions and advancements in image processing. The year 2008 started with optimism due to the summer Olympics and the looming North American DTV transition. However, as the year progressed, the overall woes of the broader economy cut consumer demand and consumption of DTV semiconductors, limiting total shipments and revenues for the year.”
Amid the market contraction, the specter of consolidation materialized, with Broadcom Corp. acquiring Advanced Micro Devices Inc.'s DTV chipset business. This was eagerly anticipated, as AMD sought to focus more on its core businesses and Broadcom strived to broaden its customer base and consumer-oriented TV chip business beyond its mainstay in set-top box offerings, says iSuppli.
Beyond the revenue decline, 2008 brought other surprises for the DTV semiconductor industry, including the rise of the Taiwanese IC suppliers in the DTV semiconductor market, and the impact of the digital terrestrial television broadcast transition to the television semiconductor market, especially in regions that use the DVB-T standard. Furthermore, after years of disaggregation, the captive business model made a shocking comeback in the global DTV semiconductor industry, says the firm.
Taiwanese IC suppliers in 2009 continued to gain share in the market at the expense of their Western competitors. This was particularly evident in the rapid demise of US chip supplier Trident Microsystems, the 2007 market leader, in part as a result of large loss in share at two of the leading TV OEMs. Trident lost the top spot in the DTV IC market to Taiwan's Mediatek in the first quarter. Moreover, another Taiwanese chip supplier, MStar, gained share in the worldwide television processor market.
Other Taiwanese companies announced moves into the DTV video processor segment as well, including Himax Media Solutions and Novatek.
“The rise of the Taiwanese supplier base for DTV ICs will be a development to keep track of in the coming years as controlling costs remains a top priority for the television OEMs in the highly competitive consumer TV market,” Lawson said.
Several IC vendors announced or began sampling advanced decoder solutions for iDTVs: DTVs with integrated digital tuners. These new video processor chips add support for more advanced codecs, such as MPEG-4, H.264 and VC-1, all of which are expected to enjoy much higher usage in iDTVs and digital set-top boxes during the coming years, according to iSuppli.
“This is because some parts of the world, especially those using DVB-based broadcast standards, are adopting MPEG-4 for terrestrial, cable and satellite broadcasts,” Lawson said. “Perhaps more importantly, such multi-format codecs are gaining popularity as more video content is sourced from the Internet, where multiple codec formats are common, and require much higher compression efficiency than current MPEG-2 solutions can provide.”
Another new feature, wireless HD interfaces, began to be offered on some higher-end television models using chipset solutions based on the WHDI and WirelessHD standards, as well as other proprietary solutions.
Bucking the trend of market share gains for third-party chip suppliers in the DTV video processor market, 2008 saw the return of the captive IC vendors, most of which are also TV OEMs, including Samsung, Sony, Toshiba and Panasonic.
In recent years, sales trends have favored the use of third-party DTV IC solutions because of a number of factors, including cost, time-to-market and the rising use of ODM production. However, since early 2008, iSuppli has been tracking a growing amount of revenues in the captive DTV IC market, most likely due to pullbacks in ODM television build engagements by some of the larger TV OEMs, as well as a move to protect and secure internal businesses.
Another segment of display electronics that suffered the impact of the second-half downturn was the display driver semiconductor market.
Flat-panel display production stumbled in the second half of the year because of the same market factors already weighing on demand for panels, especially in large-sized applications. This severely cut demand for large-sized display drivers in the fourth quarter, turning what was expected to be almost a flat period for revenue growth into a down year relative to 2007.
Several large semiconductor vendors in this space have guided for abnormally large declines for end-of-the-year driver IC shipments, another indicator of the downward trajectory in 2008 and early 2009 DTV IC shipments and revenue.
Despite the changes seen in 2008, and the near-term gloom-and-doom news for semiconductors, there is room for optimism in the television display electronics market, says iSuppli.
Semiconductor-rich televisions based on flat-panel display technology continued to show market-share growth throughout 2008. Globally, the transition to DTT broadcast continued to gain momentum and will help increase the IC content of DTVs as more decoders and digital tuner modules are required in such television sets.
In a move showing strong confidence in the DVB standards and in the DTV and set-top box markets around the world, the DVB organization in Europe approved a “post DVB-T” standard: the DVB-T2 modulation specification.
This specification will enable even higher broadcast system efficiencies, permitting increased digital channel offerings and/or more HD channels in nations and regions where DVB-T adoption is already reaching maturity.
Shipment of full-HD resolution capable TV sets increased in 2008, accompanied by higher adoption rates for advanced features such as 120Hz refresh, LED backlighting and even new wireless interfaces allowing connections to HD sources. These enhancements in features and functionality continue to expand IC content for these sets and represent a harbinger of good things to come for the broader television market, according to the research firm.
DALLAS – Maybe YA Global Investments doesn’t want EMS firm TXP after all.
The two companies reached a forbearance agreement today, under which YA Global agreed to forbear from exercising its rights and remedies, provided TXP pay $250,000 per month beginning March 20.
The deal heads off a default by TXP, under which YA Global could have helped itself to the former’s assets. As of Dec. 17, TXP owed YA Global about $10.2 million, an amount in line with the EMS firm's annual revenues.
In addition, TXP must achieve positive cash flow from operations for the month ending Aug. 30, and cash flow from operations shall remain positive for each quarter thereafter; implement a YA Global-approved cost-cutting/growth plan no later than Jan. 30; and ensure a minimum $2 million of its current and future orders will return average profit margins of at least 25%.
DALLAS -- EMS company TXP Corp. took another blow
last week as a major creditor demanded reimbursement by today.
YA Global on Jan. 8 notified TXP of its default over a failure to pay more than $250,000 and is demanding the company assemble all its pledged property, which YA Global intends to take possession of today.
YA Global on Jan. 8 notified TXP of its default over a failure to pay more than $250,000 and is demanding the company assemble all its pledged property, which YA Global intends to take possession of today.
SANTA CLARA, CA – EMS firm NBS will acquire CompServ, whose president will head the companies, the company said today. Financial terms of the deal were not disclosed.
SAN JOSE -- Flextronics is analyzing the potential effects of Nortel’s
impending bankruptcy on the EMS company’s finances and operations.
The contract assmbler has contracted with Blackstone Group as a financial adviser to study the impact, the company revealed.
The contract assmbler has contracted with Blackstone Group as a financial adviser to study the impact, the company revealed.
SAN JOSE – The MicroElectronics Packaging and Test Engineering Council has named Ronald Steger, partner-in-charge of global semiconductor practice, KPMG, as keynote speaker for its Feb. 19 symposium in San Jose.
In his presentation, The Consumer Electronics Boom - How Semiconductor and Consumer Electronics Companies Can Improve Cost, Time-To-Market and Product Quality, Steger will provide analysis of survey results, with a particular emphasis on time-to-market and cost-reduction initiatives.
Other topics at the symposium, titled Semiconductor Packaging – Impacting the Age of Consumer Electronics, include time-to-market and consumer semiconductor packaging; cost-of-ownership challenges for consumer products; solutions for consumer product miniaturization, and advancing technologies for consumer electronics.
In his presentation, The Consumer Electronics Boom - How Semiconductor and Consumer Electronics Companies Can Improve Cost, Time-To-Market and Product Quality, Steger will provide analysis of survey results, with a particular emphasis on time-to-market and cost-reduction initiatives.
Other topics at the symposium, titled Semiconductor Packaging – Impacting the Age of Consumer Electronics, include time-to-market and consumer semiconductor packaging; cost-of-ownership challenges for consumer products; solutions for consumer product miniaturization, and advancing technologies for consumer electronics.
ELKHART, IN – CTS Corp. today reaffirmed its financial guidance for full-year 2008 sales, expected to be essentially flat from 2007.
CTS will release earnings for the fourth quarter and 2008 on Jan. 28.
CTS designs and manufactures electronic components and sensors, and is a provider of EMS to OEMs in the automotive, computer, communications, medical, defense and aerospace and industrial markets.
CTS will release earnings for the fourth quarter and 2008 on Jan. 28.
CTS designs and manufactures electronic components and sensors, and is a provider of EMS to OEMs in the automotive, computer, communications, medical, defense and aerospace and industrial markets.
LOUISVILLE -- A Flextronics subsidiary will lay off about 150 workers here, according to a state filing.
Flextronics Global
Services, which employed 940 staffers as of 2007, repairs cellphones, bar code readers
and home electronics.
ST. PETERSBURG, FL -- Jabil Circuit today reported fiscal first quarter revenues of $3.38 billion, basically flat versus last year. The company's gross profits slipped to $223.7 million from $239.7 million in the year ago quarter.
SAN FRANCISCO -- Seagate Technology dumped its top two executives and will lay off 800 others in the US, the company said Monday.
DORSET, UK – Speedprint Technology Ltd. said 2008 sales were up 28% on higher demand in Europe.
The privately held Speedprint is a division of Blakell
Europlacer Group, which also makes placement machines.
LAS VEGAS -- US shipments of consumer electronics will be flat at $171 billion in 2009, according to the semiannual industry forecast released by the Consumer Electronics Association.
“The CE industry is resilient but not immune from the business cycle," CEA president and CEO Gary Shapiro said. “Innovation will kick-start the economy."
Consumer electronics 2008 shipment revenues hit new high of $172 billion, up 5.4% over 2007. In 2009, CEA projects domestic shipment revenues will essentially remain flat at $171 billion, down 0.6% year-on-year.
The primary revenue driver for the industry continues to be digital TV displays, representing 15% of total shipment dollars. As the transition to digital television nears, unit shipments of DTVs will approach 35 million in 2009, an increase of nearly 6% over 2008. LCD displays remain the top choice among consumers, representing 77% of total DTV units.
With the format war now settled, Blu-ray players are expected to see major growth in 2009. With more content, new products and lower prices, Blu-Ray revenues are projected to surpass $1.2 billion. The gaming category also remains a bright spot in the CE industry and an increasing component of consumer spending.
The overall video game market should grow 11%, generating nearly $22 billion in revenue this year, a new high mark for the category. Software continues to drive the segment, making up $15 billion of the overall sales.
Smartphone revenues will continue to grow this year, increasing nearly 20% this year, to $13.6 billion. As carriers increase the speed of their networks and offer new services in addition to communication, smartphones will account for more than 60% of total handset revenues.
“The CE industry is resilient but not immune from the business cycle," CEA president and CEO Gary Shapiro said. “Innovation will kick-start the economy."
Consumer electronics 2008 shipment revenues hit new high of $172 billion, up 5.4% over 2007. In 2009, CEA projects domestic shipment revenues will essentially remain flat at $171 billion, down 0.6% year-on-year.
The primary revenue driver for the industry continues to be digital TV displays, representing 15% of total shipment dollars. As the transition to digital television nears, unit shipments of DTVs will approach 35 million in 2009, an increase of nearly 6% over 2008. LCD displays remain the top choice among consumers, representing 77% of total DTV units.
With the format war now settled, Blu-ray players are expected to see major growth in 2009. With more content, new products and lower prices, Blu-Ray revenues are projected to surpass $1.2 billion. The gaming category also remains a bright spot in the CE industry and an increasing component of consumer spending.
The overall video game market should grow 11%, generating nearly $22 billion in revenue this year, a new high mark for the category. Software continues to drive the segment, making up $15 billion of the overall sales.
Smartphone revenues will continue to grow this year, increasing nearly 20% this year, to $13.6 billion. As carriers increase the speed of their networks and offer new services in addition to communication, smartphones will account for more than 60% of total handset revenues.
