The COVID-19 pandemic caused major disruptions in the TV supply chain in 1H20, including work stoppages and deferred deliveries throughout upstream, midstream, and downstream companies. Various retail outlets were also forced to halt operations due to pandemic-induced lockdowns, further affecting TV brands’ shipment performances. According to TrendForce’s latest investigations, total shipment of TV brands in 2020 is expected to reach a mere 214.11 million units, a 1.7% decrease YoY, but a 4% increase from the previous forecast in March, during which the outbreak’s spread was at its most aggressive. This increase in forecasted yearly shipment suggests that the stay-at-home economy generated by the pandemic is consistently gaining momentum.
TrendForce analyst Iris Hu indicates that, for the past 10 years, TV brands have shipped approximately 46% and 54% of their shipment each year in yearly first halves and second halves, respectively. Due to the pandemic’s influences this year, however, the share of branded TV shipment in 1H20 was 4-5% less than the first half averages of 46%, as brands look to shore up their yearly shipment targets in 2H20 by betting on the momentum of the stay-at-home economy.
Chinese brands are expected to compress one another’s market shares as they aggressively expand in overseas markets
Although TV brands saw a 7.7% YoY global shipment reduction in 1H20, their shipment in North America during the same period increased by 20%, thanks to stimulus bills and unemployment benefits released by federal and state governments alike in the U.S., as well as the public’s increased TV usage due to WFH demands and stay-at-home orders. In particular, VIZIO, which has traditionally centered its sales strategy on the North American market, is expected to increase its TV shipment this year by 17.6% YoY.
In addition, TCL and Hisense, which have been aggressively expanding their overseas market shares in recent years, remained undaunted by the pandemic and saw increased shipment against the downtrend by maintaining extremely cost-effective and comprehensive product lineups. On the other hand, given the overall weakened global shipment in 1H20 and the aggressive effort at capturing market shares by Chinese brands and VIZIO, the shipment performances of Japanese brands and minor brands in the second/third tiers plummeted from bad to worse.
TV brands’ profitability faces further challenges in 3Q20 as 55-inch panel prices grow by more than 20%
TV brands are stepping up their panel procurement efforts in 3Q20 to raise their market shares and to reach their yearly shipment targets, in turn driving up TV panel prices as well. As quotes for 55-inch panels in July 2020 return to July 2019 levels, they are now 25-30% higher than their low point at the end of last year. However, regarding the unit retail prices of branded TVs, prices for 55-inch UHD models in the North American market in June fell by more than 30% YoY, while there was a noticeable surge of sales discounts and promotions for high-end models. TrendForce believes that, despite the proactive push by TV brands in 3Q20, skyrocketing panel prices mean the balancing act between shipment volumes and profit margins will remain an unavoidable challenge facing TV brands.