LSI Deal Gives Magnum Semi Top Spot

The acquisition of LSI's consumer business by Magnum Semiconductor is now complete, giving Magnum the top position in the supply of DVD recorder processor ICs. The combined company will also provide media processor ICs for set top boxes, camcorders, portable media devices, professional broadcast encoders, and TV sets with integrated pause and PVR.

The DVD recorder market is growing steadily, worldwide, except in Japan, which had its first decline in shipments in 2006. The FCC DTV tuner mandate will have an impact in the US in 2007. Many manufacturers do not want to update VCRs, so many are no longer selling standalone VCRs in the US. We expect DVD recorders to benefit.

Europe will remain the largest region for DVD recorder shipments as a lower percentage of European households are pay-TV subscribers so they are less likely to be offered leased or subsidized DVRs.

In-Stat conducted its annual Residential Technology Survey (RTS) in February 2007 in the United States and in April and May, 2007, in the United Kingdom, France, Germany, Japan, and Korea. Japan has the highest rate of DVD recorder ownership with Germany and the UK not far behind. Germany and the UK, along with France, also had the highest number of respondents saying they will definitely buy a DVD recorder in the next 12 months.

Competition remains fierce for DVD silicon. Integration of features is a differentiator for IC manufacturers. Prices decline each year. The total semiconductor market for DVD recorders is declining. It will drop below $500 million in 2008. Combined with declining revenue in DVD player processors is why many IC companies are turning their attention from red laser to blue laser components.

The blue laser disc player market did better than expected in 2006, especially in North America where penetration of households with HDTV sets reached 0.4 percent. The large price declines will propel unit shipments higher to reach about 1 million units worldwide in 2007.

See all of In-Stat's Multimedia Entertainment Equipment research online at:

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