Abstract

Europe and the United State are aggressively promoting the switchover from analogue to digital TV services; the Chinese government has established several digital TV standards such as DMB-TH (terrestrial), DVB-C (cable), and DVB-S (satellite), as well as machine-card-separation standards. In addition to that, China has a digital TV installed base of 340 million units, making China an important future market for STBs. Therefore, China's STB industry is expected to keep growing at more than 20% from 2006 to 2008. By 2008, there will be more than 70 million digital televisions in China. The growth will in turn boost demand for STB ICs.

China's STB IC design houses are still in the early stages of development. Only Haier IC and Guoxin Science & Technology that were established earlier have reached a certain scale in terms of STB IC sales. In 2005, the revenue of Haier IC and Guoxin Science & Technology were 230 million RMB and 30 million RMB (US$3.9 million) respectively. As the other design houses were formed around 2004, they were rather slow at releasing their products and are thus still in the market development stage.

Science and Technology now can provide both demodulator and decoder chips. Haier IC's core competency is in MPEG and it is continuously improving capabilities in demodulator technology. HiSilicon semiconductor's core competency lies in ARM and DSP integration and it is accumulating capabilities in H.264 technology. Guoxin Science & Technology's core competency is demodulator and decoder technology. Fullhan Microelectronics, Celestial Semiconductor, and Image Silicon's core competencies lie in decoders and Fullhan Microelectronics concentrates on H264. Celestial Semiconductor and Image Silicon are more skilled in MPEG-2 technology.

In terms of clients, STB IC manufacturers that have support from system manufactures such as Haier IC, HiSilicon semiconductor and Image Silicon were able to obtain support from their parent companies in terms of orders in the early stages of their development. Companies without a parent company such as Guoxin Science & Technology, Fullhan Microelectronics and Celestial Semiconductor have also gained a wide client base. For example, Guoxin Science & Technology's clients include Soyea Technology, Thomson, Skyworth and Changhong.

In general, Haier IC and Guoxin Science & Technology are better known manufacturers because they took advantage of being the earliest producers in the market coupled with their ability of providing both demodulator and decoder chips. In the future, they will continue to be more competitive than other Chinese STB IC manufacturers. Haier IC, with the support of their parent company will do better than Guoxin Science & Technology. However, the future growth potential of HiSilicon semiconductor cannot be overlooked due to their abilities in the integration of DSP core technologies of ARM926 and LSI. The orders they receive from Huawei will also allow them to grow strongly in the future. Other manufacturers will face challenges in terms of client recognition.

Appendix

Glossary of Terms

List of Companies