EL SEGUNDO, CA – Booming sales of digital televisions during the coming years will yield huge opportunities for semiconductor suppliers, with revenue from shipments of chips for this segment expected to double between 2006 to 2011, iSuppli Corp. predicts.
The global digital TV semiconductor market revenue will rise to $14.2 billion in 2011, expanding from $7.1 billion in 2006, says the research firm.
“Global DTV shipments will rise to 230 million units by 2011, nearly three times the 77.4 million in 2006,” says Shyam Nagrani, principal analyst for display electronics at iSuppli.
Part of the reason for these gains is that beyond consumer preferences for inherently digital flat-panel TVs, there are a series of upcoming government-mandated transitions from analog to digital television—starting with the U.S. On Feb. 17, 2009, all U.S. analog broadcasts will be turned off. Europe, Japan, Korea and other nations have their own looming dates for the analog cut off and transition to DTV sets, with most countries converting to fully digital transmissions by 2015, iSuppli explains.
Also, the two main components of DTVs—glass and semiconductors—are experiencing rapid price decreases.
LCD panel prices have declined by more than 35% during each of the past two years, according to iSuppli. Price declines will not be so substantial in the years to come, but they have brought the price of flat-panel DTVs into an affordable range for a large number of consumers, the company adds. The fall in semiconductor prices is a result of greater chip integration and economies of scale resulting from the rapidly growing volumes.
In addition, the DVD player market will grow to more than 37 million units in 2011, up from 100,000 units in 2006. Camcorders are quickly moving to 100% HD penetration. Digital still cameras also will move to HD, although their HD penetration rate will not rise as quickly as for camcorders, says the firm.
iSuppli concludes that all these factors are causing a snowball effect on the DTV set and DTV chip markets, making them some of the most promising segments of the consumer electronics markets for the foreseeable future. For semiconductor suppliers, the next few years will be a period of rapidly rising sales—and opportunity—in the DTV market.