Shen Jian, a spokesman for China's second-largest TV maker Skyworth, said yesterday that patent holders with the US standard of Advanced Television System Committee (ATSC) asked for more than US$20 in royalties on each TV set. Chinese TV producers say that such high royalties would make it impossible for them to break even.

The US Government requires all TV sets and tuning devices sold in its market to include an ATSC tuner. The requirement will go into effect from March, 2007, in order to provide time for the industry to adjust before the formal closure of analogue programmes in February, 2009.

As the world's largest TV producer exporting about 50 million sets a year, China might suffer if the royalty claims are too high. The United States and Europe are two of its major export markets.

"If the patent holders ask for US$23 per unit, that could be disastrous for everybody," Shen said. An executive with TCL, the third-largest TV producer in terms of sales, said the impact should not be very serious, but that would not come without hard-fought bargains.

According to the 21st Business Herald newspaper, the State Intellectual Property Office (SIPO) has a list of digital TV set royalty claims, which amounts to US$23 per unit almost three times more than the previous estimate.

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