HDTV Rollout in China Continues to Power Cogo's Digital Media Growth

-- New HDTV Set-top Box Solution Now Shipping

Dec 09, 2010, 07:30 ET from Cogo Group, Inc.

SHENZHEN, China, Dec. 9, 2010 /PRNewswire/ -- Cogo Group, Inc. (Nasdaq: COGO), a leading embedded solutions and software provider for the technology and industrial sectors in China, continues to benefit from the strong roll-out of HDTV as total HDTV subscribers in China passed 2 million subscribers in the fourth quarter of 2010, up from 2 million in July 2010. Cogo, in conjunction with its partner, a leading global semiconductor company, provides customized solutions for HDTV set-top boxes ("STB") for use in both domestic China and various export markets.  

Additionally, Cogo, in conjunction with this same semiconductor partner, has recently launched an upgraded STB solution with additional functionality (including cable modem features) that carries a higher Average Selling Price ("ASP") for Cogo than the current solution. Cogo has already started shipping this new solution to its HDTV customers, and shipments are expected to ramp significantly in 2011. It is believed that China's HDTV ecosystem will continue to evolve over the next five years and will require new platform upgrades to drive increased functionality. It is expected this trend will continually drive higher ASPs for Cogo's customized solutions.

Several factors are unfolding that are expecting to accelerate the HDTV ramp in 2011. First, an increasing number of cable operators are expected to roll-out HDTV over the next year. Second, the government will expand the number of HDTV channels from the current 12 to 42 by the end of 2011. Triple-play field trials started in the third quarter of 2010 and trials are active in 12 cities currently; the number of cities and scope of the trials are expected to ramp significantly in 2011. Finally, cable operators in China are utilizing "mass market" upgrade pricing packages for migration to HDTV services.

"I am very pleased that Cogo continues to participate in the rapidly growing HDTV roll-out in China," commented Jeffrey Kang, CEO of Cogo. "We prove time and again and that we can quickly position ourselves to take advantage of the 'sweet spot' of rapidly growing new end markets, like 3G Smartphones, tablets, smart meters, autos and HDTV. Our order patterns in these end markets continue to drive upside to our revenue targets and provide strong visibility to maintaining high-growth in 2011."

About Cogo Group, Inc.:

Cogo Group, Inc. (NASDAQ: Cogo) is a leading provider of customized module and subsystem design solutions in China. The Company believes it acts as a proxy to China's technology industry as it works with virtually all the major ODMs and OEMs in China. Cogo leverages these relationships and combines their IP to create designs that Cogo then sells to electronic manufacturers. These designs allow manufacturers to reduce their time to market for new products and ultimately increase sales. Cogo focuses on the telecommunications equipment, digital media and industrial applications end-markets for their customized design modules while also offering business and engineering services to their large telecommunications equipment vendor customers. Over the last twelve years, Cogo has grown its customer list to include over 1,500 manufacturers across the telecommunications equipment, digital media and industrial applications markets, covering both multinational Chinese subsidiaries and Chinese domestic companies.

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This press release includes certain statements that are not descriptions of historical facts, but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include statements about our proposed discussions related to our business or growth strategy such as growth in digital media and HDTV businesses, which are subject to change. Such information is based upon expectations of our management that were reasonable when made, but may prove to be incorrect. All such assumptions are inherently subject to uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions, which are subject to change. For further descriptions of other risks and uncertainties, see our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 10-K, and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at www.sec.gov.

SOURCE Cogo Group, Inc.