Digital Video Systems Forms Joint Venture for DVD and VCD Manufacturing Facility in China; Opens Doors to China; Provides High-Volume, Low-Cost Production Capabilities
Business Wire via Dow Jones
SANTA CLARA, Calif.--(BUSINESS WIRE)--Aug. 5, 1997--Digital Video Systems,
Inc. (DVS) (Nasdaq:DVID), a developer and manufacturer of Video CD (VCD)
products and Digital Versatile Disc (DVD) products, announced today that it has
entered into an exclusive joint venture with Panyu Tian Le Electrical Appliance
Manufacturing Co., Ltd., a Chinese developer and manufacturer of digital and
home electronics products. The holdings of the venture will be split between
Digital Video Systems (51%) and Panyu Tian Manufacturing (49%).
The joint venture known as "Panyu DVS Electrical Appliances Manufacturing Co.,
Ltd.," provides Digital Video Systems with a manufacturing facility to produce
Video CD players and DVD players (currently under development) for worldwide
distribution, and provides low cost production options necessary to compete in
Asian and world markets. Panyu Tian Manufacturing is an established Chinese
manufacturer, marketer and distributor for Video CDs and will market Digital
Video Systems' Video CD and DVD products in China.
The Video CD market in China has grown from 600,000 units in 1995 to a
projected 12 million units in 1997. Substantial growth in sales of DVD players
is also expected within the next few years. According to Dataquest, the
worldwide DVD technology market is expected to grow from one million players in
1997 to 33 million players by the year 2000.
"Not only will this manufacturing facility expand Digital Video Systems'
current product offerings and production capabilities, but it will also allow us
to meet the explosive demand of VCD in China and DVD around the world," said Tom
Parkinson, president and COO of Digital Video Systems. He adds, "Digital Video
Systems is now poised for significant sales growth."
Dr. Edmund Sun, the chairman and CEO of Digital Video Systems, said "The China
market is potentially the largest market for DVD products. This venture will not
only meet our anticipated production demands in the US and in Asia, but allow us
to be more competitive in China by taking advantage of existing manufacturing
processes, reduced duties, and an established sales channel."
The Panyu manufacturing facility includes 400 employees, 150,000 sq. feet of
manufacturing space, and a production capacity of 200,000 units (players) a
month. The joint venture operations are expected to commence within the next 30
days following receipt of the appropriate business licenses from the local
Chinese authorities.
Panyu Tian Electrical Appliances Manufacturing Co., Ltd. manufactures, markets
and sells Video CD players and other home entertainment products including power
amplifiers, speakers, and stereo equipment. The company is located in Panyu
Municipality, Guangdong Province, China.
Digital Video Systems develops and markets Video CD players, including
subassemblies and components, DVD products, Video on Demand network products,
Kiosk products, digital ad insertion products, and MPEG encoding and authoring
products for entertainment, business, and educational uses. Established in
1992, DVS is a publicly held company based in Santa Clara, California, with
branch offices in Suwanee (metro Atlanta), Georgia; Taipei; Tokyo; and Hong
Kong.
This release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of 1995
that involve various risks and uncertainties, including, without limitation,
statements with respect to the Company's strategy, proposed sales of the
Company's products, markets for the Company's products, and the development of
the Company's products. The Company's actual results may differ materially from
those described in those forward-looking statements due to a number of factors,
including, but not limited to, risks of competition in the VCD and DVD markets,
the enforceability of patents and other intellectual property rights, risks
relating to the development and market acceptance of products of DVS, and risks
relating to the planned rapid growth of the business of DVS and the conduct of
business by DVS in foreign countries and through joint ventures, which factors
and others are described in documents that DVS files from time to time with the
Securities and Exchange Commission, including its Current Report on Form 8-K
dated January 7, 1997.
CONTACT: Diana Nelson
Digital Video Systems
(408) 748-2100, ext. 137
or
Jeff Lloyd/Tom J. Ekman
Sitrick And Company
(310) 788-2850
11:19 EDT AUGUST 5, 1997 |
