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China's Hisense pins hopes on chip R&D in tough TV market

Major player to build in advanced features to battle smaller rivals

Hisense Group's new R&D unit will work on image processors and artificial intelligence chips with the aim of adding advanced features to TVs, including connectivity to other appliances.
Hisense Group's new R&D unit will work on image processors and artificial intelligence chips with the aim of adding advanced features to TVs, including connectivity to other appliances.   © Reuters

HONG KONG -- Chinese electronics maker Hisense Group will focus on research and development in AI chips to make its televisions stand out in an overcrowded, flagging market.

The company has announced a 500 million yuan ($72.7 million) investment by group members including TV arm Hisense Electric to set up a company to pursue R&D.

This new unit will work on image processors and artificial intelligence chips with the aim of adding advanced features to TVs, including connectivity to other appliances. The group's product line includes refrigerators and washing machines.

Hisense Electric, which acquired Japanese peer Toshiba's TV business in 2018, has put its efforts into developing such software as that for high-definition image processing. But with rivals also working hard in this area, the group is counting on connectivity chips as well as image-processing semiconductors to differentiate its wares from the competition.

Hisense is the world's fourth-largest TV maker by volume, with slightly more than 7% of the global market in 2018, according to IHS Markit. Enjoying economies of scale thanks to serving the massive local market, it has boosted sales in Europe, the U.S. and elsewhere abroad.

But back home in China, the world's single biggest market for TVs, the market has begun to contract. Sales by value tumbled 10% or so on the year in 2018, partly on price drops as numerous smaller brands fought over the same turf. In a saturated market, unit prices are rapidly falling thanks to the flood of smaller brands. Accordingly, even Chinese TV makers smaller than Hisense are putting their efforts to develop novel products.

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