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Taiwan spotlights broadband wireless, digital home

Posted: 01 Jan 2006 ?? ?Print Version ?Bookmark and Share

Keywords:joy teng? susan hong? consumer electronics? wimax? digital home?

As expected, consumer electronics (CE) remains to be the main driving force for the semiconductor market in 2005. However, under the requirements of meeting diversified personalized demands, 3C convergence and application innovation have become even bigger challenges for vendors. As for Taiwan's electronics industry, maintaining competitiveness in wireless communications and CE markets is still the main focus, while bright prospects in WiMAX and digital home are also taking center stage.

As xDSL penetrates into the digital home, the emerging wireless broadband technology is also trying to catch up with the trend. WiMAX, strongly promoted by Intel Corp., is aggressively moving into the "last mile" market with promised convenience and aims to establish the broadband wireless access (BWA) network in metropolitan areas. Although its 802.16 standard was not finalized until June 2004, many vendors, including Intel Corp., Fujitsu and Wavesat Inc., have already launched chipset products for WiMAX. Its next mobile version, 802.16e, has also attracted attention in the industry.

However, even if the outlook for WiMAX market is promising, the price for its customer premises equipment (CPE) is still too high at $200 to $300.

"Price will be the main issue that will determine if WiMAX can be widely adopted," said Feng Chian, executive VP of Taiwan Fixed Network. With much interest in this technology, TFN has already launched its test project for WiMAX. "As market volume gets bigger, it is estimated that prices for CPE will drop below $100 by 2007 and $60 by 2009," Chian said.

"The price drop might be much faster than we expect," said Cynthia Chyn, deputy general director of Market Intelligence Center (MIC), as she cited the information from Intel. "WiMAX is an open platform. Since there are no loyalty issues, it is expected that more vendors will adopt WiMAX," said Chyn. She also believes that the market will move forward after WiMAX penetrates mobile applications. "Still, the problems of price and power consumption have to be solved before the WiMAX market can really take off. It will first target fixed applications in the home market, replacing DSL as the last mile to the home," added Chyn.

Eyeing new opportunities, some Taiwan electronic companies are engaging in the development of WiMAX devices. According to Chyn, communication device makers such as Gemtek Technology Co. Ltd and CyberTan Technology Inc. are already developing WiMAX routers or base stations. "Taiwan produces more than 70 percent of communication devices in the world. We are in a good position to gain ground in the WiMAX market," she said.

It is no secret that Intel is speeding up the progress of integrating WiMAX into notebooks. "WiMAX will first target those in Asia-Pacific, particularly in China, India and Southeast Asia, where telecom infrastructures are not well established. For Taiwan chipmakers that are now suffering from the decreasing margin of WLAN products, WiMAX will bring promising prospects."

Taiwan's Ministry of Economic Affairs (MOEA) has signed an agreement with Intel to jointly promote WiMAX in the island, planning to invest up to $1.1 billion between 2005 and 2008 for its ambitious Mobile-Taiwan project aimed at establishing a comprehensive wireless broadband communication network and environment.

Entertainment is hot
In the advent of the digital home, portable entertainment devices are being seen as fresh opportunities. Under the rapid development of DTV broadcasting and flat-panel display technologies, LCD TVs still play an important role in Taiwan's display and CE market.

Intel plans to launch various digital home multimedia devices with viiv technology, emphasizing the importance of portable devices in the home. "To improve the home-entertainment experience, contents such as films, games and music can be transmitted from the PC to portable devices for easy access anywhere in the house," said Don MacDonald, VP of the Digital Home Group at Intel.

According to the Industrial Economics and Knowledge Center, the market of portable music players will grow rapidly from 2004 to 2010. Also, characterized by easy operation, rich content and high quality, portable DVD players will continue to be mainstream products for the mobile A/V market. Disk-based portable multimedia players (PMPs) will also gain ground in the consumer market segment if issues in content and price can be resolved.

"Although many Taiwan companies moved into the PMP market early, few received orders of large quantities. Most of them are still in the pilot production stage," said IEK analyst Alex Hou. Since Taiwan is not so competitive in key PMP technologies and components, he suggested that similar OEM/ODM models for PSP/iPod are good for Taiwan companies if they want to move into this market.

On the other hand, LCD TVs are still in the spotlight in Taiwan. Although DisplaySearch predicted that the display market will be oversupplied in the next three years, Taiwan's panel makers are still investing aggressively.

According to MOEA, overall investment reached $7.74 billion last year, mainly in 5G and 6G capacities, including Au Optronics Co. Ltd's 6G plant in Taichung and Chi Mei Optoelectronics' 5G plant in Tainan. In addition, TFT makers are planning to invest in 6G or 7G plants this year. It is estimated that the total investment will amount to $160 billion, making Taiwan the biggest LCD maker in the world.

- Joy Teng and Susan Hong
EE TimesTaiwan

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