Intel Corp is stepping back from the TV system-on-chip (SoC) market after struggling to compete with established rivals.
According to an IHS market tracker report covering the first half of 2011, Intel’s share of the TV SoC market fell to just 2%, while MStar Semiconductor held approximately 39%.
As a result, the Google partner plans to shift its focus toward smartphones and media tablets rather than continuing to invest in its Google TV initiative, which has experienced disappointing sales.
IHS researchers also identified several factors contributing to slower-than-expected growth in the Smart TV market. Key issues include unclear market definitions and fragmented product positioning, which can confuse consumers and dampen demand for new TV technologies.
Randy Lawson, principal analyst for display and consumer electronics at IHS, commented: “In a television semiconductor market characterized by entrenched suppliers and weak near-term growth prospects, Intel was facing enormous challenges in trying to establish itself as a competitor.”
Another concern for suppliers is prevailing pessimism about the television market’s future and a projected decline in market revenue. IHS expects flat growth for flat-panel TV semiconductors, driven by high component prices, weak low-end demand and lukewarm consumer interest.
“Intel will wind down operations in the digital TV (i.e. flat panel) media processor business and will no longer develop silicon for flat panel TVs after our next generation 32nm chip ships next year,” said Kathy Gill, an Intel spokesperson.
She added: “There are tremendous synergies between tablets and TVs as both are primarily content consumption and viewing devices. We are expanding the charter of our Netbook and Tablet Group by combining it with the CE business, which includes the Cable and IPTV businesses.”
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