en.Wedoany.com Reported - The boom in South Korea's semiconductor industry has given rise to "Chip Inflation," leading to a sharp increase in manufacturing costs for various downstream sectors, including the pay-TV industry. Against the backdrop of explosive demand for high-performance and high-capacity chips in the AI era, the prices of semiconductors required for set-top boxes, such as DRAM and eMMC, have surged more than tenfold compared to previous years. Consequently, the unit procurement cost of set-top boxes for pay-TV operators is expected to rise by more than twofold.
Set-top boxes (STBs), as key devices for receiving broadcast signals and displaying images on televisions, have evolved in recent years into AI-based smart home hubs, providing digital video platform services such as live broadcasting, VOD, YouTube, and OTT applications. This has led to a continuous increase in demand for high-end semiconductors. However, chip inflation has created a structural contradiction for the pay-TV industry: operators are deploying AI-based high-performance set-top boxes to prevent user churn, but the soaring semiconductor prices mean that higher set-top box costs result in greater losses.
According to data from the Korea Communications Commission and the Ministry of Science and ICT, between 2022 and 2024, the number of cable TV (SO) broadcast subscribers decreased by 3.6%, with an average annual decline of approximately 230,000 users, totaling a reduction of about 460,000 users. The entry of global OTT services into the domestic market and the expansion of domestic OTT market share have exacerbated the difficulties faced by pay-TV operators. Meanwhile, FAST (Free Ad-Supported Streaming TV) services, operated primarily by home appliance companies, have also emerged as potential alternative threats. Against this backdrop, rising semiconductor prices have led one pay-TV operator to raise the upper limit of set-top box rental fees for new customers by approximately 40%, ultimately further increasing the burden on subscribers.
The public value of set-top boxes has drawn attention. According to data from the Korea Communications Commission, over 80% of individuals aged 50 and above watch television more than five days a week, and 71.5% of those aged 70 and older consider television an indispensable medium in their daily lives. The increase in set-top box rental fees has a more significant impact on the elderly and socially vulnerable groups who heavily rely on television, affecting not only their social communication but also daily activities such as disaster response. To safeguard the television viewing rights of the public, including the elderly, the industry has called on the government to study policy support measures. These include addressing fairness in the imposition of broadcasting and communications development fund contributions between pay-TV operators and terrestrial broadcasters and comprehensive programming channels, as well as providing subsidies and incentives for set-top boxes based on their public value. Such measures aim to protect viewing rights and bridge the digital divide amid the wave of chip inflation.
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