China's TV makers face a sharp cut in profits under a new US$10 patent fee for each digital set exported to the United States. The requirement for China to comply with the technical requirements of the US Advanced Television Systems Committee goes into effect on March 1.

The China Chamber of Commerce for Import and Export of Machinery and Electronic Products said in a report that five of the more than 170 patent holders for the ATSC standard, including Sony, Thomson and Tri-Vision, have demanded that Chinese producers pay US$10 dollars for each set sold in the US.

The patent fee could amount to some US$160 million, given that Chinese manufacturers were estimated to have exported 16 million color TV sets to American last year, according to China's Ministry of Information.

The fee may rise if other members of the standard group demand a patent fee in the future; Guangzhou-based Southern Metropolis News quoted the chamber as saying. An earlier report said fees could be as high as US$23 per unit.

The fees will deal a heavy blow to China's TV industry as its profit margin is already thin, Bai Weimin, who works in the products bureau of the Ministry of Information, told the China Securities Journal.

Chinese manufacturers price their cathode-ray sets at an average US$61.22 and liquid-crystal-display TVs at an average US$320.39. The gross profit amounts to only 10 percent of the price, and the patent fee would mean little or no profits for Chinese producers.

Source:未知