TrendForce：UHD TV market limited, China becomes territory to fight for among panel makers

According to the observations on the UHD TV market by WitsView, the display research division of the global market intelligence provider TrendForce, after the hit topics LED, 3D, and Smart TV that raised attention one after another from 2010 to 2012, OLED TV’s development was surprisingly slower than expected. Hence, from the second half of 2012, TV brands have started to launch UHD TVs, declaring the commencement of the Super High Resolution TVs. With the trend, panel makers also begin to showcase UHD TV panels aggressively from 2013.  
  
Based on WitsView’s observation on the overall UHD TV developments, it has been more than ten years since the transmission standard of UHD TV was proposed by NHK in 1995, and it was officially recognized as the transmission standard of the next super high resolution TV by International Telecommunication Union (ITU) in 2012. While the sports game programs of UHD resolution were broadcasted for trial during the 2012 London Olympic Games, the 2014 FIFA World Cup in Brazil and the 2016 Rio Olympic Games are generally expected to be keys for TV networks and TV brands to promote UHD TV sales.
   
According to Boyce Fan, WitsView’s research manager, under the current UHD TV panel cost structure, as the resolution lifts fourfold from FHD and the panel transparency drops, the costs of driver IC and BLU should surge inevitably. In addition, the yield drops, the overall cost will surge to about 1.4-1.6 times from the FHD models. Taking the 55” UHD TV panel for instance, the overall cost is estimated at around USD 650-750, and the profit is around 20-30% for panel makers when comparing to the current UHD TV selling prices. In order to lift rapidly the UHD TV market volume, in addition to yield improvement, the spec. cuts in BLU, driver IC structures, and panels will be keys to trim UHD panel costs.  
   
After the Chinese market rapidly raised penetration rates of LED, 3D, and Smart TVs in the past years, the 2013 marketing focus will be place on the UHD TV, especially the products with low-cost panels. As Chinese TV brands have no IC solution that analyzes UHD images as the first-tier TV brands but depend on panel makers for complex transformation resolutions between panels and images, the image quality is not as superior as the first-tier TV brands, but the selling price and cost come closer to the affordable level for consumers. As a result, WitsView projects that China is likely to become the main playfield where the UHD TV market scale grows quickly and also a territory to fight for among panel makers.

Based on WitsView’s estimates, excluding China as a special case, the overall UHD TV development is still constrained by the brocasting standard, storage devices, and immature regulations such as transmission bandwidth and standard. Furthermore, the native UHD image contents are still very limited, and FHD signals are mostly upgraded to UHD signals by the IC solution for analyzing and scaling. We can say that the existing hardware develops beyond the software, and the UHD TV penetration rate will stay below 5% until 2015. With the limited panel supply and elevated costs and selling prices, the penetration rate for UHD TV panels in 2013 will come to only 1.2%. And Chinese top 6 brands will control over 80% of the 2013 UHD TV market with their relatively low-priced models.

Figure 1: cost comparison between UHD and FHD panels
Source：WitsView
  
Figure 2: penetration rate forecast for UHD TV panel shipment

Source：WitsView