Set-top box semiconductors moving high-end while commoditizing
There is a deep irony in the market for set-top box (STB) core semiconductors: They’re cheap enough. Most operators are choosing to add features and capabilities instead of further reducing their spending on STBs. This is reflected in all of the attendant supply markets, including set-top box core semiconductors.
The new update to IMS Research’s (recently acquired by IHS Inc.) Semiconductors in Set-top Box Market Share report has revealed that the market for set-top box core semiconductors is expected to be stable through 2016 despite a trend to commoditization. A 3% increase in volumes and moves to more advanced architectures (including both MPEG-4 AVC, and TV Gateway + thin client architectures) are forecast to conspire to keep overall revenues in the segment essentially flat at approximately $2.7 billion per year. The segments that have the largest upside over 2011 revenues of core semiconductors are HD MPEG-4 AVC STBs, TV gateways, and thin clients, all of which are beginning to displace traditional SD MPEG-2 core chips.
The supplier-side data in the report also indicates a trend towards commoditization, with all of the Western chipmakers except Broadcom experiencing a drop in revenues compared to 2010 while the major Taiwanese entrants generally grew revenues.
The Set-top Box Semiconductor Market Share report was assembled with data from across the IHS Technology Media and Telecommunications business in addition to IMS Research’s data and expertise. It includes a comprehensive market-sizing forecast by set-top box semiconductor segment (modulation, compression, SD vs. HD, etc.) and market shares of the top chipmakers.