TV Semiconductor Market Poised to Enjoy Biggest Year Yet in 2010

Record revenues to be spurred by LED backlights and other high-end LCD-TV features.

LED backlighting and other advanced television architectures making their way into an ever-larger number of LCD-TVs will power the global TV semiconductor market in 2010 toward its biggest year yet, according to iSuppli Corp.

Coming off a robust $9.3 billion turn in 2009, the TV semiconductor space is headed for an even stronger year in 2010, with LCD-TVs incorporating more semiconductor chips to support the various sophisticated features toward which present-day consumers gravitate. As a result, revenue for the TV semiconductor market will finish 2010 at a spectacular $12.1 billion, iSuppli forecasts indicate.

Such a high-water mark—the first time revenue passes the $10 billion threshold—would imply an annualized growth level of approximately 29 percent for 2010—almost six times the 5.5 percent expansion rate posted by the market in 2009.

Not unexpectedly, chips used in LCD-TVs will ship in the greatest amount during the forecast period, far ahead of all other TV display technologies. In comparison, chip shipments will hold steady at the low 10,000 level for plasma, continue on a path of irreversible decline for CRT, and be all but nil by 2012 for rear-projection types.

High-end Features—but Not 3-D—to Drive Growth
The single most lucrative portion and largest area of growth for the TV semiconductor market centers on the use of LED backlights for LCD-TV panels. Compared to the old technology of CCFL, LED backlights offer higher image contrast, reduce power consumption and improve overall product styling by allowing a thinner panel profile.

At present, more than 150 LCD-TV models in the North American market alone feature LED backlighting— and the roster continues to grow. LED-related semiconductor revenue will enjoy tremendous expansion as LED penetration deepens and takes root, rising from just $400 million in 2009 to more than $4 billion by 2014. All told, shipments of LED-backlit TVs are projected to hit 25 million units in 2010—an increase of more than 400 percent from 2009 shipment levels.

In addition to LED backlighting, a number of advanced television features will drive the TV semiconductor space in the years to come, iSuppli data show. These features include Full HD 1080p resolution, Internet access, wireless connectivity and frame rate conversion to support 120/240Hz playback—all of which will require the use of greater quantities of advanced video processor chips.

Surprisingly, 3-D technology—despite the enormous publicity and hype surrounding this coveted TV feature— is not expected to be a major growth driver for TV semiconductors. Nonetheless, OEM and consumer interest in 3-D-enabled models will spur faster penetration of 240Hz support in LCD-TVs, due to the image crosstalk issue of current 3-D solutions. And current initiatives by LCD-TV manufacturers and panel suppliers to incorporate higher frame rates, such as 120Hz and 240Hz, will subsume onto the overall bill of materials the new additional functionality required by 3-D technology, iSuppli believes.

As a result, while 3-D heralds a new era of advanced TV viewing for consumers, the technology itself will not significantly impact TV semiconductor revenue in general, or the market revenue for video processors in particular.

LED Use also Propels Power ICs to Higher Revenue
The use of LED chips as a backlighting source for LCD-TV panels is also a substantial factor driving growth in the power Integrated Circuit (IC) segment, iSuppli analysis indicates.

As consumer concerns on TV energy use become increasingly important, manufacturers are meeting the challenge by designing more intelligent power supplies, audio-visual motherboards and electronics—all utilizing power ICs—to achieve greater power efficiencies as well as satisfy the more restrictive power consumption guidelines that have been set by government regulatory agencies.

Revenue for power ICs is expected to increase to $1.8 billion in 2010, up 38.5 percent from $1.3 billion last year, iSuppli data show, with growth to continue until at least 2012, when revenue hits $2.5 billion.

A dip to $2.4 billion then is projected in 2013, after which revenue levels pick up again and climb in 2014 to $2.7 billion, iSuppli forecasts show.