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junko.yoshida
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China's conditions
junko.yoshida   8/28/2013 9:39:09 AM
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The restrictions placed by Chinese governments does look strict. I wonder what exactly this will accomplish. Better pricing deals for Chinese TV OEMs on TV chips they need to source, or buying time for china's indigenous chip companies to emerge before MTK totally dominates China's TV chip market?

Peter Clarke
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Re: China's conditions
Peter Clarke   8/28/2013 10:03:01 AM
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I wonder how effective this will be.

If MStar folds its handset and wireless business units into MediaTek it will leave it as a subsiduary that only does TV chips. Maybe MediaTek will just give up trying to compete with itself...and be the wireless, smartphone, tablet IC provider.

 

junko.yoshida
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Re: China's conditions
junko.yoshida   8/28/2013 11:00:27 AM
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My understanding is that Mstar has solid TV chip business in China. The reason why MTK wants that TV market segment (beyond their growing smartphone market) is that those two segments will continue to get interconnected. Look no further than Qualcomm. They too want to get into smart TV chip business.

Peter Clarke
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Re: China's conditions
Peter Clarke   8/28/2013 11:10:20 AM
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According to the Ministry of Commerce document MStar (referred to as Cayman MorningStar) has about 65 percent of the Chinese LCD TV main controller market and MediaTek has about 15 percent.

In other words the two between them have about 80 percent. If MediaTek stopped competing MStar would probably pick up most of the shortfall. 

Of course the Chinese authorities might not like that and it would not necessarily be wise for MediaTek to upset them.

One of the other conditions of the deal is that MediaTek has to report to the Chinese authorities on a quarterly basis.

elctrnx_lyf
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Re: China's conditions
elctrnx_lyf   8/28/2013 12:27:54 PM
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These conditions might deter mediatek from the acquisition but still it would be great benefit for them to form a joint venture.

krisi
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$4B
krisi   8/28/2013 12:35:37 PM
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$4 Billion, finally we are talking soem money...this is larger than any of the largest 5 semi deals story EE Timnes run very recently

rick merritt
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Re: China's conditions
rick merritt   8/28/2013 1:25:13 PM
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Methinks we are witnessing the birth of another Qualcomm or Broadcom, one plugged into one of the world's biggest emerging markets and living in the home of low cost system manufacturing.

That said, they have a lot of execution to do against some very savvy compeitors.

Peter Clarke
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Re: China's conditions
Peter Clarke   8/29/2013 5:33:17 AM
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As MediaTek already has an almost controlling interest I dont think a 5JV would make sense.

It would depend on the detail but MediaTek could end up with more than half the total equity but without overall control

Anyway a different understanding would have to be reached with the Chinese govt. as this approved plan with conditions is for a complete merger.

 

 

Frank Eory
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Re: China's conditions
Frank Eory   8/29/2013 2:03:26 PM
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I was thinking the same thing -- are we seeing the creation of a Chinese Qualcomm or Broadcom?

Robert Syputa
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Re: China's conditions
Robert Syputa   8/29/2013 8:11:13 PM
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Junko, I was thinking much along the same lines as your post: it may take another 2-4 years for the LCD/TV landscape to change, however, I think the convergence of smartphones with consumer electronics devices (of all types) is now nearing a juncture where its finally ready to transform the TV. That will drive more overlap in chips and software.

The 'smart TV chip' business and mobile device chip business are being driven closer together and successful vendors must work to drive functionality across both environments.  I've called that the 'seat to the street' experience which focuses on mode of use rather than a particular device definition.  

A challenge for Mediatek will be to provide a more unified approach between to the rapidly gowing clone SmartPhone and consumer electronic markets.  That will require a greater focus on contributing to a comon software ecosystem.  

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