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Analysts see DTV chip market consolidation ahead

Posted: 27 Dec 2007     Print Version  Bookmark and Share

Keywords:DTV  market consolidation  analysts report 

STMicroelectronics' proposed Rs.1,325.85 crore ($336-million) acquisition of DTV chipmaker Genesis Microchip, announced earlier this month, could be the beginning of a long-expected wave of consolidation among chip companies that supply the booming DTV market, according to analysts and executives.

"I've been expecting some consolidation for a while, and this is just step one," said Shyam Nagrani, a principal analyst at market watcher iSuppli Corp. "There are so many players in the market, and no clear-cut leader."

Nagrani said he expects a further shrinking of the supply base. He mentioned Pixelworks Inc. as a possible acquisition target. Even a relatively large player, such as Trident Microsystems Inc., could be available for "the right price," he said.

"For the silicon providers, there is going to be a wave of consolidation," agreed Jos Klippert, marketing director of high-end- and mainstream-TV solutions at NXP Semiconductors. "We've just seen it start, I think."

Klippert said a determining factor would be which companies had the right intellectual property to survive. He said the economies of scale are intense for companies that want to move to the next level of CMOS processing and develop IP for next-generation HDTV panels that provide 120Hz refresh rates and use motion estimation and motion compensation technologies.

"We've seen some roadkill in the past couple of months," Klippert said. "There needs to be a wave of consolidation now."

Nagrani said ST is getting a good deal in Genesis. ST has done well in the MPEG-2 decoder business, but not as well in the back end, where Genesis is strong, he said.

- Dylan McGrath
EE Times




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