TrendForce：Taiwan, Japan share tasks professionally, AMOLED launched inevitably

Sony revealed the first 56” 4K2K OLED TV of the industry in CES this year, not only showing its ambition for OLED TV planning but allowing the market to peek at the highly-anticipated product of Sony and AUO’s cooperation. According to WitsView, the display research division of TrendFroce, in the LCD market, the integration ability usually means competitiveness advantages, as the resources are constantly shared and the brand power is weakened, the professional task sharing may replace the complete integration in the future, will be the new mainstream market value, and further impacts the OLED TV developments. 

WitsView indicates that Taiwan’s panel manufacturing faces challenges from Korea in terms of technology and threats from China in terms of capacity. In addition, without the support of the domestic brands, Taiwanese makers have relied only on external clients’ orders for a long time, seeing mounting obstacles. Although they lack vertical integration advantages, Taiwanese makers’ role as professional component suppliers is neutral and apparent.

Besides, Taiwan-based panel makers such as AUO and Innolux continue the R&D on various display technologies and products. Taking AMOLED for example, AUO has not only devoted significant research resources, but controlled the IGZO capacity of large generations. It lags Koreans in maturity but leads Chinese and Japanese makers on the OLED product developments.

WitsView believes that the TV brands’ focus shift is another key that drives OLED TV developments. Japanese brands who dominated the market during the CRT era have lost their competitiveness advantages when the LCD TVs rise, which is quite related to the acquirement strategy of the crucial component LCD panel. Both Sharp and Panasonic put their own abilities to the LCD panel production, but the brand developments are dragged down by the panel manufacturing which turns out to be a heavy burden on elevated production costs. 

Although Sony chose to co-develop panels by joint-venture with Samsung, the joint-venture showed limited benefits to Sony actually and provided chances for Samsung to grow instead, forcing the Japanese maker to give up the No. 1 crown with regrets. The integrations between brands and LCD panel production don’t seem successful, and this will be a strategy mirror for Japanese panels to review the importance of the resource integration and the professional tasking when developing OLED TVs. 
The Korean brand LG has officially put its OLED TV on sale at the beginning of this year, but the elevated costs and significant production complexity cause high selling prices, indicating the OLED TV development is only at the initial stage and the following coopetition and development direction still have large flexibility. WitsView says that Taiwan owns professional manufacturing ability and ample production bases, while Japanese TV brands enjoy great brand reputation and marketing resources in the global market. In the condition of professional task sharing and execution, if manufacturing-oriented Taiwan and marketing-oriented Japan can work together on OLED TV developments, they can save overlapping costs expenditure significantly and perform the complementary effect of “one plus one is greater than two. This kind of combination will hold quite good conditions and compete with the Korean brands who appeal for high integration.