Cirmaker Licensed to Make Set-Top Boxes for China
Jul 14, 2004
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Cirmaker Technology Corp. said today it received the three licenses needed from the mainland Chinese government to manufacture set-top boxes (stbs) for satellite, cable, and microwave connections that are capable of converting an analog signal to a digital signal.

Cirmaker, headquartered in Taiwan, manufactures cooling systems for laptop and personal computers, electrical and electronic components, and 3G MHP (3rd generation multimedia home platform) digital set top boxes for television sets.

The company has developed set top boxes that convert digital television broadcast signals into analog formats, so that analog TV sets can receive digital programming. The system also receives, processes, stores, and broadcasts analog, digital, and streaming media signals, and supports pay-per-view and video-on-demand functions.

Cirmaker believes it is the only 3G MHP STB manufacturer operating in China able to produce in volume a device that meets all the required standards of Chinese broadcasting authorities. It is also designed to comply with all international HDTV standards for high definition television.

Mainland China's Televisions

There are an estimated 340 million analog television sets in China, according to the market research organization of the China Central TV station, the government channel. Most of these TVs will require a stb system to process the digital signal to be usable on an analog TV. In China, a digital TV costs five to ten times the price of an analog TV.

The State Administration of Radio, Film and Television, the government agency that promotes television, radio, and movies in China, expects that by 2008, the year the Olympics are held in Beijing, 200 million households will have completed the conversion to digital from analog. At the end of 2003, fewer than 170,000 households were equipped with sets that received a digital signal.

It is estimated that there are cable systems in about half of the Chinese provinces; the rest will use satellite. A set-top box system for satellite reception includes a satellite dish, a tuner and a receiver. It sells in China for approximately U.S. $50.

The Chinese Ministry of Information Industry (MII) issues the "on-site" production license, which only one manufacturer in a region obtains. MII issued only eight of these licenses to manufacture stbs; no more will be issued. All eight licensees are owned by mainland Chinese companies. Cirmaker Technology owns its license through its 66-percent ownership stake in Shaanxi New Century Electronics Co., which produces the stbs under the Ruyi brand name.

The other two licenses include the 3C-quality license, certifying that production methods meet government quality standards, and a license to permit the connection of the stb to the television transmission network.

Ruyi, one of the top-selling television set brands in mainland China, is owned by Shaanxi Ruyi Electric, one of China's top TV set manufacturers and 34-percent owner of Shaanxi New Century Electronics.

Cirmaker Technology CEO and President Bill Liao said, "We are pleased to have received the last license to produce set-top boxes with satellite and cable functionality for the mainland China market. As far as we know, Cirmaker Technology is the only company that is publicly traded in the United States that has a license to participate in this significant market opportunity. In China, we are offering a top quality stb with a popular brand name at a competitive price."

Shaanxi New Century Electronics' factory is headquartered in Xian Yang, Shaanxi Province, which is in the middle of mainland China. In western China, which is about half of the country's land mass, Shaanxi New Century Electronics is the only company that has a license to produce these stbs.

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