1 Jan 2008

According to the Market Intelligence Center of Taiwan's Institute for Information Industry, the island's shipment of Digital Terrestrial Television Sept-Top Boxes, though having picked up during the second half of 2007, will probably tumble nearly 35% on a year-on-year basis to an annual total of about 2.0 million units due to fierce competition from Chinese makers.

Looking ahead to 2008, owing to the effect of the ATSC STP subsidy program in the United States, the termination of analog signal broadcasting in Western Europe, and the inauguration of DTT in Eastern Europe, Taiwan's DTT STP shipment volume is expected to pick up in 2008. Moreover, some Taiwan makers have started to to develop advanced hybrid IPTV ( Internet Protocol TV/DTT STPs, demand for which is projected to emerge in 2008.

So far, Western Europe has been the major shipment destination for Taiwan makers, with major shipments being DVB-T ( Digital Video Broadcasting Terrestrial ) with Conditional Access (CA) as well as Free-to-Air (FTA) DVB-T- STBs without CA.

Owing to lower technological thresholds, Taiwan FTA DVB-T STBs without CA have been facing challenges from low-tagged Chinese products. In the major markets of Germany, France and Spain.

Taiwan makers also used to enjoy a fair share in the UK market featuring the MPEG-5 standard, thanks to the entry barrier posed by technologies and certification. However, the UK market was no longer impregnable following the acquisition of MPEG-5 certification by various IC design houses and the subsequent release of reference boards to Chinese STB makers. Chinese makers have since then launched a low-price offensive, posing serious challenges to Japanese, Korean, and Taiwan makers alike. As a result, Taiwan DVB-T STB shipment volume and value both dropped about 40% year-on-year by the second quarter of 2007.

With demand in the Italian market remaining sluggish, shipment share of DVB-T STBs with CA plunged, making low-tagged DVB-T STPs with CA the mainstream. As a result, the average selling price of Taiwan DVB-T STBs tumbled nearly 20% year-on-year to US$ 28 in the second quarter of 2007.

As the U.S. government is not expected to implement to ATSC STB subsidy program until 2008, the local demand for ATSC STBs remained sluggish, and Taiwan ATSC STB shipment volume reached 46,700 units in the second quarter of 2007. At present, Taiwan makers' shipment mainly consists of common non-subsidized models, which feature higher specifications such as HDTV ( High Definition TV ) reception and HDMI ( High-Definition Multimedia Interface ). Therefore, the ASP ( average selling price ) of Taiwan ATSC STBs remained at the level of about US$75.