MediaTek's planned merger with MStar Semiconductor will help MediaTek expand its presence in the digital TV-chip market, as well as enhancing its capability in the ever increasing competition.

If the deal proves to be successful, Digitimes Research believes, it will manifest that cooperation or integration will also be an option for companies in Taiwan, which has not seen enough of industrial integration that has resulted in a high degree of homogeneity in production and keen price competition.

Although MediaTek has seen sales of its handset solutions even increasing, it also faces more and more challenges, which include a slow development of its TD-SCDMA chips. A merger with MStar will allow MediaTek to pour in more resources for further development of the handset market in China.

With regard to TV chips, since the TV systems are moving toward of being more intelligent with high performance, MediaTek will be able to roll out turn-key TV solutions, optimizing MStar's TV chip lineups as well as its system integration capability and IP support.

ARM and MStar extend relationship with license for ARM Cortex-A9 processor (April 23) - Company release