Because more companies are currently developing DVD player chips there is a large possibility that there will develop a price war that will drop the prices of the chips used in DVD players and could also drop the prices of DVD players.
Digitimes reports that currently the companies MediaTek and ALi are the big players on the DVD player chip market but will be joined by the company ESS. The market is now mainly focussed on chips that are an all in one solution, so less chips are needed.
Currently, most DVD players are equipped with one servo and one MPEG-2 chip per unit, which individually cost around US$5-7. Compared to the reported single-chip price of US$10-12, adopting separate chips is indeed more expensive. If combined with material costs, the single-chip solution will help manufacturers reduce their overall production fees by 10-12%, which is rather appealing to player makers, as DVD player prices keep falling. According to Taiwan's Market Intelligence Center (MIC), single-chip-based models may at most account for one-third of the DVD player shipments worldwide in the second half. |
Boosted by rising shipments, the higher price of DVD player single-chips is likely to push up the average chip price to US$9.56 in the fourth quarter from US$8.58 in the first half. However, the increasing number of chip suppliers also implies that a new price war may soon develop.
Source: Digitimes.com
