WitsView: CMO and AUO ranked first and second in October among panel suppliers for China TV brand vendors; 39” and 50” panel sizes make strong market inroads

For 2011, it will likely be characterized as a sluggish year to global TV brand vendors, as the global economic downturn severely curbed consumer demand. Furthermore, this sluggishness is not expected to recover at least until early 2012. In response, brand vendors have been particularly keen in maintaining relatively low inventory levels. In terms of their 2012 market plans, aside from introducing new TV specs and display sizes to attract potential consumers, products launched in 2H12 will feature even sharper resolutions (two times that of older models) to make them even more suitable for use with a PC. Sales of 3DTVs will also be driven up by this trend. Further TV evolvement will involve in the integration of SMART TV and home appliance connectivity. WIDI technology will also be utilized more by TVs and MNTs, as they function as the display platform for home, business or entertainment purposes.  

According to WitsView, a research division of TrendForce, and Chinese research institute, Σintell, the projected global LCD TV shipments for 2011 has now been revised down to 200.5 million units, equaling to an annual growth of roughly 6.5%. In terms of strategic inventory controls conducted by the top 6 China TV vendors, the aggregated LCD TV shipments for October dropped to 3.5 million units, down by 32% MoM. However, growth is expected to resume again in November, as preparations begin for the Chinese Lunar New Year holidays. Shipments are forecast to grow by 14% MoM to once again hit the 4 million mark. For the entire year of 2011, their aggregated shipments are predicted to reach approximately 39 million. Given the fact that all 6 Chinese vendors focused more in controlling their respective panel inventory in October, it rendered their total TV panel procurement volume to reach only 3.3 million units, down by 18.7% MoM. However, as mentioned above, the momentum will pick up again in November, where shipments are expected to hit 4.3 million, up by a whopping 28.2% MoM. November will likely be the month with the highest TV panel procurement volume in 2011. This growth will more or less ease the output and pricing pressure faced by panel makers.

WitsView’s Director, Burrell-Liu, indicates that due to the brand vendors’ huge downward revisions of their respective 2011 annual LCD TV shipment targets, even with the predicted near 20% LCD TV quarterly shipment growth in 3Q11, the positive effect on the overall panel demand and supply will be minimal. Brand vendors will continue to focus more on maintaining a relatively low inventory level. Thus, despite another near 14% quarterly growth projection in 4Q11, the persisting inventory adjustments will still cause the panel segment to experience a -1.4% annual decline for 2011. On the bright side, the increasingly healthier inventory levels, rush order effects in 4Q11 and preparations for the Chinese Lunar New Year holidays are helping to stabilize panel prices. In addition, as long as panel makers maintain effective capacity and inventory controls, the launch of new models during the end of 1Q12, coupled with the anticipated demand that will be spurred by China’s Labor Day holidays in May 2012 and subsequent Olympic Games in July 2012 and August 2012 will all be conducive to a panel price rebound. On another front, panel makers are aggressively exploring new opportunities by offering new display sizes and tapping the public information and large-sized TV display applications to further expand businesses.

It is worthy to note that CMO continued to be the top panel supplier to China’s top 6 TV brand vendors in Oct11, garnering a 31% share. AUO came in second, accounting for a share of 23%. CMO and AUO have been very aggressive in deploying the new 39” and 50”display sizes (please see Table 1). The market adoption of the two respective sizes by both the China TV vendors and international brand players have helped stimulate the current market doldrums, especially in the 50” portion. It is even rumored that two other panel makers have plans in entering this particular market, as well. Separately, Samsung’s development of the 43” and 48”are currently employed only by the China brand vendors. Thus, their product life cycles are expected to be shorter. As for LG and other players, they are aggressively trying to replace the 37” with the 36.5”.

 Meanwhile, Japan’s PLD and Sharp are seeking to diversify the panel products manufactured by their higher generation production lines. PLD’s progress and strategy is considered to be faster and more specific. Sharp’s status, on the other hand, is a little more worrisome. Earlier, there were market reports that Sharp had halted its panel production. Although this was later confirmed to be untrue, there are concerns that Sharp’s still overly high panel stock will affect its future performance.

Table 1: New display sizes deployed to retail by Top 16 global LCD TV band vendors in the retail segment.

Source: WitsView