STMicroelectronics went public this week with news that it has set up a joint venture in Shanghai with a local firm and expects to begin operations by late 2004. The venture will develop, market, and sell middleware software for digital TV and set-top boxes.

 

The Chinese partner is closely affiliated with Shanghai Jiaotong University, and it brings to the venture both TV middleware technology and head-end software for TV operators. STMicroelectronics will own 65% of the joint venture and plans to employ around 20 people.

 

The new partnership for STMicroelectronics is further evidence of how China is heavily promoting its digital TV market. In May 2004, Motorola announced that it was preparing to spend up to US$33 million to purchase 30% of the Hong Kong-based, set-top box maker DVN Holdings. Over the summer, Thomson bought out most of the stake held by Nokia in another Chinese set-top box maker, forming a new venture called Thomson/Citic Digital Technology. 

 

China currently has more than 100 million cable TV subscribers, but most use analog service. China Central Television (CCTV) and Shanghai Media Group recently introduced a series of new digital pay TV channels. The industry has set a target of 30 million digital TV subscribers within the next few years, with plans to phase out analog service completely by 2015.