According to WitsView, a research division of TrendForce, and Chinese research institute, Σintell, top six China TV brands July shipment have increased to 2.924 million units with MoM growth of 12.5% and YoY growth of 33.7%; another 16% YoY growth is expected in August. The weak market demand during the same period last year, the price cutting promotions launched by main brands in China in July, and follow-up stocking for holidays are all contributing factors to this growth. In contrast, the LCD TV panel procurement has been sliding to 2.79 million units with MoM regressed demand of 8.2%.
WitsView has modified the worldwide LCD TV demand to 201.4 M units this June, and the latest number has indicated the YoY growth of merely 7% of overall demand. Due to the current global economic status and the fact that “house appliance to the countryside” subsidies will be gradually terminated (3 provinces by the end 2011 and 9 provinces in 2012), the growth in China is expected to drop from 15% this year to 10~12% in 2012, and the overall growth of wolrdwide LCD TV next year will be around 7~10%.
(1) July shipment status for top six brands
WitsView Assistant VP, Burrell-Liu indicates that the July shipments for the top six Chinese brands are as follows: TCL ranked top one with 25% growth, followed by Changhong’s 16% of growth, Hisense increased its shipment by 15%, while Skyworth and Konka increased by 13% and 6.5% respectively, meanwhile, Haier suffered the sole drop of 13%. In terms of the July shipment ratio for all brands, Hisense is ranked number one with 25% of shares followed by the TCL’s 21%, Skyworth’s 19%. Haier’s market share dropped to 8.5%, and ranked last. Most notably, Hisense, TCL, and Skyworth ranked from number 8 to 10 among the Top 10 global LCD TV brand market shares(Table 1).
Table 1. Market shares of global LCD TV shipments in first half of 2011
The penetrations rates for six LED TV major brands in July are around 48%, while the average penetration rate of LED TV from January to July is around 40%. According to WitsView survey, the overall LCD TV penetration rate is approximately 42%, while the average penetration rate among top six brands in China is roughly 45%.
The domestic and international shipment ratios between January and July shipments for six major brands was approximately 76% to 24%, while the shipment ratio between China and international markets was about 73% to 27%. In July, there was a MoM growths of both shipment ratio and shipment quantity of domestic market for the first time since May, and the high shipment level has been maintained for export.
(2) July panel procurement status for top six brands
In July CMI accounted for 38% of the shipments of the top six panel brands and maintained the leading position for three consecutive months, with YoY growth of 56% and MoM growth of 13.5%. LGD ranked 2nd with 24% of total shipments (regressed 16% from the previous month). AUO and SAMSUNG ranked third and fourth with market shares of 17% and 15% respectively. As of July this year, the top four of the six major panel makers, CMI and LGD have secured first and second place with 29.5% and 29.2% respectively, while SEC and AUO took 17.7% and 17.2% of shares respectively.
WitsView’s assistant VP, Burrell Liu, indicated that with the upcoming Mid-Autumn Festival and National Day Holidays in China, the overall shipments among six major brands are estimated to grow by 19% in Q3. Despite the significant increase in shipment expectation, the six major brands must carefully control their TV and panel shipments with a current inventory of 6 weeks. Moreover, while market demand in China has been relatively robust compared to the markets in other parts of the world, China only accounts for about 20% of the global market, hardly enough momentum to drive the demand and other international brands in the remaining 80% of the markets.
WitsView has also estimated the global LCD TV growths at around 15% in both Q3 and Q4. This number may appear decent, but it has been modified several times with reduced demands. With the excessive production capacity, the growth hardly alleviates the oversupply situation and price decline.
From the suppliers perspective, Korean makers maintained about 80% of average utilization rates, after taking into consideration of their customer bases and marketing strategies. The reduction of utilization rate is necessary to prevent further price decline and to maintain a balance of the overall production and sales. The price decline can only be stopped if Taiwanese makers reduced their production capacity to a extreme of 50% as in 2008. However, a consensus in production reduction among panel makers is necessary for panel price to be stabilized both in Q4 or in the future.