Motorola to outsource production of IP STB

Motorola Corp., the world's largest manufacturer of telecommunication equipment, will end in-house production of IP STB (Internet-protocol set-top boxes) and will outsource production to contractors in Taiwan beginning next July.

The outsourcing move is expected to bring in orders worth approximately NT$10 billion (US$312.5 million at US$1:NT$32) to domestic contract manufacturers such as Hon Hai Precision Industry Co., Zyxel Communications Corp., Zinwell Corp., and NuVision technology Inc. The company chosen by Motorola as a contract manufacturer for the production of IP STBs is expected to receive large, lucrative orders.

In addition, Motorola's Asia Wideband Research and Development Center in Hsintien, Taipei County, northern Taiwan, will conduct research on FTTB (fiber to the building) equipment in cooperation with the government-funded Industrial Technology Research Institute. The Motorola center currently procures FTTB modules from domestic IC design houses, including Mediatek Inc., Novatek Microelectronics Corp., and VIA Technologies Inc.

The Market Intelligence Center (MIC) under the government-backed Institute for Information Industry (III) said 2006 would be a banner year for the development of IPTV (Internet protocol television) globally. The growing demand for IP STB and FTTB equipment will help domestic Internet firms grab huge sales in the years to come.

Taiwan shipped US$118 million worth of IP STBs last year. Due to strong promotion by international telecom firms, III estimated Taiwan would be able to ship 2.51 million units of IP STBs, or US$300 million based on a unit price of US$119, this year.

Motorola said it has seen annual sales reach US$1 billion for wideband networking equipment such as IP STBs, cable modems, and FTTBs for the past several years. An industry insider estimated the IP STBs produced by Motorola in Taiwan amounted to NT$10 billion (US$312.5 million) annually.

In addition to Motorola, such big names as Thomson and ADB have also commissioned production of IP STB to domestic contract manufacturers of Internet communication equipment.

source & copyright: CENS