MediaTek announced the acquisition of Morningstar in 2012, due to the two sides in the mainland TV chip market share of more than Qi Cheng, in the face of the Ministry of Commerce review, has been approved by the restriction.According to the requirements of the Ministry of Commerce, MediaTek and Morningstar both companies can be 100% In the merger, Morningstar's mobile chip division can also be transferred to MediaTek, but the TV chip divisions of both companies must maintain their independent operations within three years, giving television customers another look forward to the buffer period of chip suppliers.
Since then, the original Morningstar mobile phone department more than 800 employees into MediaTek, the original morning Star TV chips and set-top boxes, about 2000 employees stay in Taiwan Morningstar.
Under the three-year ban imposed by the Ministry of Commerce, MediaTek has chosen Morningstar to operate as a subsidiary and its own TV chip team has also been operating to develop its own product planning, customers and markets, and the two sides have maintained a competitive relationship so far.
The Ministry of Commerce's three-year ban on the merger of the two companies expired in August 2016. In September 2016, MediaTek and Morningstar Taiwan (hereinafter collectively referred to as the parties) filed an application to lift the restrictive conditions attached to the "Announcement." 2017 In November, the parties added new reasons and evidence.
MOFCOM said that after receiving the application, the two sides held talks with the parties on many occasions asking for supplementary evidences and soliciting opinions from relevant government departments, trade associations and downstream enterprises in written form, and verified the parties concerned Fulfillment of obligations According to the Anti-Monopoly Law of the People's Republic of China (hereinafter referred to as the "Anti-Monopoly Law"), the "Regulations on Concentration of Business Owners with Restrictive Conditions (Provisional)" and the requirements of the "Notice", the Ministry of Commerce The implementation of the "Notice", changes in the market competition, comprehensive assessment of the reasons for the lifting of the restrictive conditions and the impact of competition in the relevant market conditions.
Analysis of TV Master Chip Market Competition
MOFCOM assessed the changes in market competition and the impact of lifting the restrictive conditions on market competition according to law, and assessed that the competition conditions in the relevant markets have undergone major changes and that it is difficult to remove the restrictive conditions to exclude or restrict market competition.
(A) The market share of the parties dropped significantly.
According to the Notice, the market share of Cayman Morningstar in China's LCD TV main control chip market is 65%, and MediaTek's market share is 15% and the total market share is 80%. Since 2013, MediaTek and Morningstar Taiwan Market According to independent third party data, in the first half of 2017, in the LCD TV main chip market in China, the market share of Morningstar Taiwan was about 40% -45%, and the market share of MediaTek was about 5% -10%, with a total of less than 50 %, The market share dropped significantly.
(B) new competitors to enter the relevant market.
According to the "Notice", in the LCD TV main chip market in China, other market participants, except MediaTek and Morningstar, have a small market share and few new entrants. Since 2013, Ruidi Ke, Crystal Morning , Hass One after another into the relevant market, Luk Wing and Realtek market share is also rising, the parties formed an effective competitive restraint.According to independent third-party data, first half of 2017, Realtek, Ruidi Ke, Samsung, United Wing 4 competitor market share of about 5% -10%, more than MediaTek.In addition, Hass, Crystal Morning also set a certain competitive constraints MediaTek.
(C) downstream TV manufacturers dependence on the parties significantly decreased.
According to the "Notice", mainland China's six major TV makers are MediaTek and Cayman Morningstar as a major chip supplier, there is a certain dependence on MediaTek and Cayman Morningstar Since 2013, with the increase of new entrants in the market, Chinese TV manufacturers and other chip suppliers to increase cooperation in recent years have several domestic chip companies into their supplier system, the relocation of MediaTek and Morningstar significantly reduced.
(IV) The lifting of the restrictive conditions can reduce the parties' repeated investment and R & D costs.
The parties argued that due to restrictive conditions requiring MediaTek and Morningstar Taiwan to commit themselves to continuing to invest in R & D costs on TV chip products, respectively, and developing similar competitive products, resulting in duplication of investments in both technologies, the lifting of the restrictive conditions may reduce duplication of parties Investment, reduce research and development costs.
(V) The industry characteristics examined in the "Notice" further appear.
According to the Notice, the Ministry of Commerce conducted an in-depth examination of the status of the industries in which the relevant products are located, and considered the characteristics of the industry in which the LCD TV chips are located and the changes in supply and demand to a certain extent weaken the unfavorable impact of such concentration on competition. First, the LCD TV main chip market competition pattern is unstable. Second, the transaction provides growth opportunities for other market participants .In recent years, the "Notice" in the study of the industry characteristics and development trends further.First, the smart TV Second, after the transaction, TV makers in Mainland China began to seek other competitors as suppliers and several new competitors successfully entered the market. market.
Insiders pointed out that for the size of 'M', can enter the second phase of the merger, the main difference lies in the integration of both the TV chip team and resources efficiency; if the merger will reduce duplication of investment on both sides and reduce operating costs , And then pull up the benefits.
According to "2017 China TV Consumption and 2018 Trend Forecast Report" released by China Electronics Standardization Institute, top-end upgrades have become the mainstream color TV consumer trends. In 2017, the sales volume of color TV sets in China was about 48 million units, basically the same as in 2016, prominently The bright spot is that the market share of artificial intelligence TV has risen significantly, an increase of 80% over the previous year. Large size, ultra-thin, curved surface and 4K large-size TV have become the mainstream of color TV consumer market with obvious high-end TV symbol.
Due to more and more smart TV products that support 4K specifications and networking capabilities, global TV brand makers willing to adopt the strategy of small profits but quick turnover will be able to stimulate their terminal replacement needs easily. According to the forecast by DIGITIMES, the first quarter of this year, TV-related Chip orders growth momentum, as well as orders for the second quarter visibility will become more optimistic, has recently begun to reflect the TV, the downstream supply chain performance of the orders.
Nowadays, MediaTek Morningstar merger to lift the restrictive clause, can be said to coincide with their will.