Growth in demand for consumer electronics equipment including digital televisions and set top boxes will drive the MPEG video IC market for the next several years.

The Moving Picture Expert Group (MPEG) video IC grew a hefty 36% to $1.8 billion and will grow about 22% in 2004 to $2.2 billion, according to researcher In-Stat/MDR.

Increases in shipments of DVD players and set top boxes were responsible for much of the unit growth in 2003. While DVD player shipments will level off, growth in other products consuming MPEG-4 video ICs, like DVD recorders, digital television sets, and digital terrestrial set top boxes, will keep the total market growing every year through 2008.

"MPEG-4 ICs will become a force in the market over the next several years as broadcasters use more efficient compression to deliver video to mobile devices and other receivers," says Michelle Abraham, a senior analyst with In-Stat/MDR.

The mobile handset market will be one of the largest markets for MPEG-4 ICs—particularly those handsets with cameras able to capture video and those with digital TV tuners for mobile broadcast reception. MPEG-4 ICs will grow at a triple digit rate reaching more than 100 million units in 2007.