China Invests In DVD Industry
EE Times - 12/03/98, 7:37 p.m. ET
China is stepping up efforts to kick-start a domestic DVD industry,
investing in such key technologies as laser diodes for optical heads,
MPEG-2 decoder development, and the improvement of DVD
manufacturing capabilities, in the hopes of building demand among
consumers for the emerging but expensive technology.
In anticipation of the new market that the Chinese government's
investment in DVD technology will open, foreign companies such
as C-Cube Microsystems, ESS Technology, STMicroelectronics,
Panasonic, and LSI Logic are offering their own single-chip DVD
solutions to Chinese OEM.
Manufacturers and industry analysts, who gathered in Beijing last
month for a government-sponsored symposium, predicted Chinese
consumers will buy 15 million video CD (VCD), super video CD
(SVCD), and DVD players in each of the next five years. Demand for
DVD players is expected to take off next year, with as many as 10
million players sold annually beginning three to four years from now.
Peng Fu, chief analyst for market researchers Advanced
Forecasting-HuiCong, in Cupertino, Calif., said relatively cheap video
CDs and VCD players will make it tough for DVD manufacturers to
crack the Chinese market. "At least for the next two years, the DVD
market in China will not grow so fast," Peng said. "After two or three
years, maybe the [DVD] market will be better."
The China State Press and Publication Administration "is supporting
the new products in electronic publishing," said Mao Xiaomao of the
Administration's Department of A/V and Electronic Publishing. "We
approved the importing of seven DVD-manufacturing lines and a
mother-disk [production] line."
Despite progress on several fronts, the nascent Chinese DVD-software
industry faces other barriers. The biggest is the lack of national DVD
standards to support the software industry. Another is the lack of
high-quality titles that can drive demand for DVDs. As things stand,
most domestic films must be reproduced to improve their audio to
international standards like 5.1-channel sound.
The Chinese government is pumping funds into research on key
technologies in the hopes of seeding a home-grown DVD capability.
Supported by the government, the Semiconductor Institute of the
Chinese Academy of Science has developed a new 650-nanometer red
lightwave laser diode. The laser's power, optical, and temperature
characteristics appeared promising in tests in which it was used as an
optical head. Researchers at Tsinghwa University are developing other
parts of the optical head, including work on a lens, actuator, and other
components.
Feng Jichun, vice director at the High-Technology Development and
Industrialization Ministry, called the laser-diode work a "breakthrough
of key technologies," adding that the focus now is on volume
production. "Our scientists and engineers are paying more attention to
the innovation of technologies that will help our enterprises release the
pressure of [intellectual property rights]," Feng said.
Elsewhere, fabless design houses like the state-sponsored China IC
Design Center and other domestic chip makers are focusing on
developing MPEG-2 decoders. VCD player makers are also
investing in similar video technology. Some are working
independently, while others are cooperating with U.S. partners.
300 Titles So Far
As the number of DVD titles in the Chinese market grows to about
300, so does the list of foreign companies announcing single-chip
DVD solutions. Among the first was C-Cube Microsystems, in
Milpitas, Calif. C-Cube announced it will supply fully tested chip sets
that will let DVD manufacturers in China quickly incorporate them into
their players. The company also said it will help Chinese OEMs
produce DVD cameras based on its DVD-RW technology.
One of C-Cube's chief rivals, digital video-chip vendor ESS
Technology in Fremont, Calif., is also trying to help manufacturers
ease the transition from SVCD to DVD production. Its ESS 4408
solution aims to provide audio functions like 5.1-channel sound and
karaoke via software. The 4408 integrates 32-bit RISC video and a
64-bit DSP, letting developers use high-end C language
programming to develop DVD functions. ESS' programmable
multimedia processor also lets OEMs offer other capabilities through
DVD players, including video telephones and teleconferencing.
France's STMicroelectronics and Japan's Panasonic have also jumped
into the Chinese DVD market, promoting themselves as one of the few
IC makers offering manufacturers a complete line of DVD design
solutions. STM announced a low-cost DVD-on-a-chip based on a
32-bit RISC processor. Meanwhile, Panasonic's solution includes the
necessary chip sets and a kit that were originally released in Japan.
Panasonic's DVD chip sets are now attracting Chinese partners
through its joint ventures in China as well as through its national
support network.
LSI Logic, which set up a facility in Beijing, has announced design
wins for its DVD decoder chip, and expects to announce more before
the Consumer Electronics Show in January. LSI's Hong Kong-based
partner has also developed DVD solutions for the Chinese industry that
are expected to help China meet its goal of producing 1 million DVD
players next year.
Meanwhile, the state-run Xinhua Bookstore, China's largest, said it
would use its chain of stores to form a network for renting DVD titles.
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