TV semicon market set for long-term expansion after Q1 dip

EL SEGUNDO, USA: Despite a major plunge in revenue in the first quarter and an expected decline for all of 2009, the market for semiconductors used in televisions is set to enjoy strong long-term growth due to the rise of LCDs and the continuous increases in the capabilities of sets, according to iSuppli Corp.

Global market revenue for semiconductors used in all types of TVs is projected to rise to $13.9 billion in 2013, up from $9 billion in 2008.

However, in 2009, global television semiconductor market revenue is expected to decline to $7.6 billion in 2009, down 15.4 percent from 2008. The 2009 decline is largely due to a weak first quarter when revenue dropped on a sequential basis for the second consecutive quarter to $1.55 billion, down 4.1 percent from $1.6 billion in the first quarter, and down a whopping 41.3 percent from $2.6 billion in the first quarter of 2008.

Nonetheless, following the first-quarter decline, global TV semiconductor revenue will rise by more than 20 percent on a sequential basis during the second quarter, with continued growth expected in the third quarter as inventories are restocked leading into the seasonally stronger fourth quarter.

Fig. 1 presents iSuppli’s estimate and forecast of global, quarterly television semiconductor revenue.Source: iSuppli Corp., June 2009

“The pinch that consumers around the world are feeling from the global economic downturn has hurt recent demand for television semiconductors,” observed Randy Lawson, senior analyst for DTV and display electronics for iSuppli. “Sales of higher-end televisions models with the latest features struggled in the first quarter, impacting shipments of higher-priced advanced semiconductors. Meanwhile, smaller-screen, less feature-rich sets are expected to expand their share of total television unit sales. This caused revenue from shipments of TV semiconductors to decline.”

A brighter picture
“Despite the near-term uncertainty blanketing the television semiconductor business, iSuppli expects the market to continue to expand partly due to the increased adoption of LCD-TVs,” Lawson said.

“LCD-TVs will account for 91 percent of worldwide television semiconductor revenue by 2012, up from 62 percent in 2008. This shift in display technology will provide room for the semiconductor content to grow due to the higher electronics requirements for LCD-TVs compared to CRTs.”

Fig. 2 presents iSuppli’s forecast of the percentage of TV semiconductor revenue derived from various display technology types.Source: iSuppli Corp., June 2009

High semiconductor content for high definition
Another factor driving the television semiconductor market is the continual increase and adoption of more advanced image processing functions to improve the quality of standard-definition content displayed on full High-Definition (HD) panels. This will result in increasing electronic content in the backlight to allow for lower power and better contrast ratios.

Other elements demanding more electronics content will include the addition of network connectivity options, the adoption of 3-D rendering technology and more powerful CPUs to support denser graphics, advanced user interfaces and access to Internet content.