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Keyword：Jeff Yang，
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2018/08/01
Global shipments of LCD TV sets totaled 4775 million units for the second quarter of 2018, according to WitsView, a division of TrendForce This shipment figure represents a quarterly decrease of 38%, as a result of the high inventory level of channel distributors For the rest of this year, the surging panel prices will bring more uncertainties in 2H18 Considering the lower-than-expected shipments in 2Q18, WitsView expects the shipments for the whole year to increase by 23% YoY to 2157 million units, lower than the previous forecast of 219 million
“The TV market had remarkable shipments in the first quarter thanks to the stock-up demand for the World Cup”, says Jeff Yang, the research manager of WitsView “However, the high inventory level of channel distributors has affected the market since the second quarter” As the result, TV brands have adjusted their shipping schedules and panel purchases Despite the upcoming peak season in the third quarter, it would be difficult for TV brands to offer promotions if the panel prices surge too high The demand would also be restrained by the high panel prices
Falling panel prices in 1H18 may help QLED TVs gain more cost advantages
Samsung, the leading TV maker, attempts to capture more of the high-end market segment with its QLED TVs, but the sales turned out to be lower than expected last year in the fierce competition with OLED TVs Samsung has been actively shipping its excess channel inventory of older products in 1H18 In addition, QLED TVs, which are based on the structure of LCD panel and QD film, managed to gain more cost advantages thanks to the low panel prices However, as QLED TVs target at the high-end market segment, the annual TV shipments of Samsung would continue to decrease to 41 million units
While Samsung heavily invests in QLED TV business, LG Electronics (LGE) and Sony have adopted less aggressive strategies, taking respective second and fifth place in the 2Q18 shipment ranking They have achieved better-than-expected profitability and maintained a healthy level of inventory thanks to continued promotion of OLED products In the second half of this year, LGE will continue to expand the share of OLED TV in its product mixes, which would help increase its annual shipments slightly to 286 million units In terms of SONY, it will strategically abandon some of its low-end and non-profitable products in order to maintain its brand positioning in the high-end market As the result, SONY would post marginal decreases in annual shipments, which are estimated at 116 million units
Chinese TV brands are actively expanding in the global market
Chinese brands TCL and Hisense have promoted their brand awareness during the World Cup, through celebrity endorsements and official sponsorships respectively They took third and fourth place respectively in the second quarter shipment ranking although the stock up demand ended earlier than expectation According to the forecast of WitsView, their shipments for the whole year of 2018 will be approximately 166 million and 138 million units
As the Chinese TV market gradually grows saturated, the expansion in overseas markets has become the key to the growth of Chinese TV brands TCL has been actively expanding in North America and other overseas markets with its cost advantages brought by in-house panel supply from CSOT Hisense also explored overseas businesses through the purchase of Toshiba Visual Solutions Corporation (TVS) and using the Toshiba brand for a period of 40 years It is expected that Chinese brands will be increasingly influential in the global TV market
Surging panel prices in 3Q18 may become a potential risk for brands in the peak season
Entering the third quarter, the prices for 32-inch panels have rebounded, leading to the price surge of panels of other sizes To avoid panel shortages in the busy season, TV brands and OEMs have started to compete for panel supply and are willing to buy panels at higher prices For the brands, they will be able to set the TV prices for promotions only when the panel prices are stable Therefore, the rising costs of panel and supply uncertainties will bring potential risk to brands in the peak season
2018/06/26
The stock up for the World Cup has come to an end in 1Q18, earlier than expected The market grows weak in 2Q18 with no particular demand for TV panels WitsView, a division of TrendForce, estimates that the major branded TV makers will reduce their panel purchases by 4% quarterly in 2Q18
“The TV industry will enter the traditional peak season in the third quarter, so TV makers will be more active in panel purchase in order to achieve the annual shipment goals”, says Jeff Yang, the assistant research manager of WitsView Therefore, WitsView estimates that the major TV brands’ panel purchases will increase by 10~15% quarter-on-quarter
Gap between demand and supply continues to expand in 2Q18
TV brands have already prepared for demand brought by the World Cup in advance Considering the time for preparing raw materials, shipping and distribution, the brands have stocked up panels before 1Q18 However, the panel purchases decrease by 4% QoQ in 2Q18, with the World Cup coming to an end and lower-than-expected sales of TVs during Chinese New Year and May 1st holiday In addition, the uncertainties about US’s tariffs on Chinese products also influenced the brands’ purchase plans
Moreover, Chinese panel makers, including Gen 105 of BOE and Gen 86 of CEC-CHOT, have begun to ship panels to the market, making the supply and demand situation even more imbalanced As the panel prices continue to drop, TV brands may adopt more conservative purchase strategies in 2Q18 Through the conservative purchase plans, TV makers would not only avoid stock depreciation, but also be more prepared for the peak season in the second half
Branded TV makers will be more aggressive in sales with higher panel purchase plan in 3Q18
Looking forward to the peak season in 3Q18, TV brands will be more aggressive in sales in order to achieve their annual shipment goals, says WitsView According to the recently proposed tariffs on Chinese products exported to the US, TV sets are not in the tariff list Therefore, for the short term, TV brands are faced with lower risks for stock up, they can also further plan for the promotion in Europe and the US
Particularly, WitsView notices that the prices of large-size 4K TVs have been decreased in the 618 mid-season sales of China In the promotion, there were limited offers of 55-inch and 65-inch TVs at the price of RMB 1,999 and RMB 2,999 respectively This trend shows that TV brands aim to boost the demand for large-size TVs with the help of lower panel prices
As for the supply, TV panel prices have been decreasing for over a year due to the oversupply in market, even approaching the cash costs of panel makers For the short term, there has been no sign that panel makers would cut the production, but they have been optimizing the production mixes to reduce the share of 32-inch or smaller panels and increase the share of 43-inch or larger ones This strategy will help panel makers stay in line with the TV set makers’ product plans, and consume more capacity at the same time
Looking forward, WitsView stays optimistic about the 3Q18 TV market, since the US-China trade war will not impact the TV set market for the short term Together with the lower and lower prices of large-size TVs, WitsView estimates that the major TV brands’ panel purchases will increase by 10~15% quarterly
2018/05/03
Prices of LCD TV panels of all sizes have been decreasing since the end of 2Q17, and have not shown any sign of stop so far, according to the latest report from WitsView, a division of TrendForce In 2Q18, TV panel prices will show further decline for various size segments compared with 1Q18: the 32-inch by 20%~22%, the 43-inch by 13%~15%, the 49- to 50-inch range by 12%~14%, the 55-inch by 9%~11%, and the 65-inch by 14~16%
BOE has begun to ship panels of 65-inch or above this March after its Gen 105 fab entered mass production, indicating the price war among large-size (65-inch or above) panel makers will go more intense, says Jeff Yang, the assistant research manager of WitsView The aggressive entry of 65-inch panels has been a potential threat for 55-inch ones, the current mainstream products The demand for 32-inch panels will be lower in 2Q18 as vendors’ stocking up for the World Cup has come to an end, resulting in continuous price decline for this size segment
BOE’s Gen 105 fab entered mass production, starting the price war among large-size panel makers
Normally, panel manufacturing startups in China will operate at full production capacity as soon as possible in order to obtain government subsidies, so the return of investment and depreciation expense are not the main considerations for them BOE's gen 105 fab entered mass production in this March, and plans to reach the monthly production volume of 80,000 pieces before the end of this year The economic 65-inch and 75-inch panels are estimated to be shipped in large quantities Particularly, 65-inch ones will be the main product, considering its market size and good yield rate in new fabs comparing with 75-inch In addition, CEC-CHOT’s and CEC-Panda Chengdu’s Gen 86 fabs also joined the competition in this March and May respectively, which will inevitably influence the demand for current mainstream sizes produced by Gen 85 fabs such as 32-inch, 43-inch, 49-inch and 55-inch products
On the demand size, the market is also not very positive First of all, TV vendors actively shipped products at the end of last year, aiming to boost the sales goals However, the performance in the end market was lower than expected, so vendors end up with a high level of inventory Second, the stocking up for the World Cup has also come to an end in late 1Q18 Last, the market is full of uncertainties due to the US-China trade war, so vendors tend to be more conservative in purchase in 2Q18
Demand for small size to decrease as the stocking up for the World Cup ends
The 32-inch products has always been the driver of small-size TV market The panel prices directly affect the brands’ pricing strategy for TV products Entering the second quarter of 2018, the demand for 32-inch panels has gradually weakened, but the overall supply remained the same, resulting in a steeper price decline for this size segment and lower prices of 32-inch TVs as well Even 55-inch panels will see a steeper price decline faced with the pressure brought by 65-inch panels’ price drop In sum, it is difficult for the overall price falling to stop in the second quarter, as production capacity for large-size panels rose and supply for small-size panels dropped
The Pressure for Panel Makers May Ease in 2H18 if the Demand Recovers in Peak Season
Regarding the third quarter, the US-China trade war and the promotion during China's retail event on June 18th will be the key to the demand recovery If the demand recovers in the peak season, the pressure for panel makers may be eased However, if the demand is lower than expected, it is not ruled out that panel prices will continue to drop to the point approaching cash costs In that case, how to achieve the balance between market share and cost pressures will be a key problem that panel makers cannot avoid
2017/12/18
WitsView, a division of TrendForce, reports that the global shipments of branded LCD TV sets for 2017 will total 210 million units, a decrease of 41% compared with prior year For 2018, the shipments decline will reverse, and grow by 39% to 218 million
“The panel prices have tumbled more than 17% on average since 2Q17,”says Jeff Yang, assistant research manager of WitsView, “coupled by the sales on China’s annual Singles Day and Black Friday, the shipments continue to rise” TV brands expect to continue the rise till the Chinese New Year, and to further expand their shipments during global sports events such as Winter Olympics, Super Bowl and World Cup
Samsung will remain the market leader despite of 1% drop in shipments, TCL expects shipments rise due to vertical integration
In 2018, Samsung’s TV business will continue to be profit-oriented with product development focusing on QLED TV for high-end market segments The shares of high-resolution (4K) and large-size (49'' or greater) TV sets will both surpass 50% in the shipments As for small-size (under 49'') ones which have a lower gross margin, Samsung will increase the percentage of outsourcing in its manufacturing process to optimize the costs Overall speaking, Samsung will remain the market leader in 2018 despite of 1% shipments drop led by its strategy of maximizing profit
OLED TV market shows remarkable performance this year, resulting in global shipments of 15 million units, a 72% rise compared with the previous year WitsView expects that LG Electronics (LGE) and SONY will continue to expand their OLED offerings in the high-end market, both brands will record slight shipment rise in 2018
TCL Corporation records a shipment of 143 million units, ranking the third, as the result of effective vertical integration of its panel, TV assembly and brand business It is expected to achieve constant shipment rise in 2018 and a yearly growth of 67% Its vertical integration will be a valuable reference for other brands because this strategy not only secures stable in-house panel supply, but also allows more flexible configuration of costs for the TV sets
Sharp recorded 975% YoY rise in shipment because of Foxconn’s effective integration of upstream and downstream resources
Hisense, another Chinese TV brand in the list, is unfavorable in competition due to the lack of in-house resources in the panel market Whether it can improve the unfavorable status quo and keep the growth will depend on its performance in developing overseas market Hisense has already taken steps to deploy overseas by purchasing Toshiba’s television business
Foxconn has already owned Sharp’s panel resources and TV assembly supply chain, its subsidiary, Innolux, also expands its television assembly business in 2017, bringing Sharp’s shipment to 94 million units, a massive growth of 975% Sharp will race to achieve its annual target of over 12 million units next year Although Sharp is not likely to enter the global top five in 2018, but will emerge as a threat for other Chinese TV brands in lack of in-house panel resources, such as Hisense and Skyworth
To sum up, TCL secures its place in top 3 in 2017 and Sharp regains its competitiveness in the TV market, showing that the vertical integration of panel, TV assembly and brand business operations will be a key for brands to strengthen their position in market and to sustain growth For 2018, large-size, high-resolution and OLED TV sets will remain the key products in TV market In addition, major global sports events will also boost the demand Therefore, WitsView forecasts an increase of 39% in global branded LCD TV shipments, totaling 218 million units
