TrendForce: Panel Makers Compete in 50”-and-under UHD TV Market with UHD TV Panel Penetrate Rate Possibly Rising to 2% in 2014

Since the UHD TV became the market’s focus in 2013, TV makers have pinned the hope on the product to lift sales momentum in the sluggish market. According WitsView, the display research division of the global market intelligence provider TrendForce, the UHD TVs launched by 1st tier brands usually feature high value-added functions such as 3D and smart internet connection, making the new models unaffordable. Besides, the broadcasting and transmission standard that meets UHD TV spec has not established yet, and the native UHD program content is insufficient, making the UHD TV sales extremely difficult. WitsView projects a penetration rate of only 0.8% for UHD TV panels in the 2013 panel market, and the low-cost UHD TV panel is likely to be a bright spot chased by panel makers in 2014, seeing a penetration rate up to 2%.

Panel makers emphasize on the spec at the beginning of development, including 120Hz and 3D with mostly sizes of 50” and above. The main mass-produced sizes are 55” and 65” to underline the UHD TV’s high-end position, which have costs higher than the FHD panel by 1.5-1.6 times. However, INX has a distinct strategy on the UHD TV by not only adopting the sizes under 50”, including 39”, 42”, and 50”, but lowering the product spec to enter the Chinese market with advantages of low costs. As long as the set selling price comes to the sweet point for consumers, the market scale is likely to further expand.  

WitsView research manager Boyce Fan says the key to produce the low-cost UHD TV is to cut the frame rate and reduce the use of key components such as driver IC and Tcon, meanwhile, the panel transparency must be lifted to drive down the BLU module cost and boost the panel production yield.

Besides, the formation of “One Tcon Solution” will largely simplify the signal transmission structure between the TV system end and the panel end, a development direction for the upcoming new UHD TV models. Generally speaking, the cost gap between the UHD TV panel and the FHD can be narrowed to 1.3-1.4 times by adjusting the spec and simplifying the structure, and the gap would approach to 1.1-1.2 times with the rising yield.   
   
In addition to the cost concern, based on the UHD TV panel price changes and the set retail prices, it can be found that the high-end 65” UHD panel has a 1.5 time price gap with the FHD, while the low-cost 50” has gap within 1.3 times. For the TV set retail selling price gap, the 65” has a selling price gap as large as 3 times between the UHD and the FHD models in North America, while it is only a 1.5 time gap between the 50” UHD and FHD TVs in China. Under the current economic environment, WitsView believes prices remain the main drivers to consumption. 
  
Low-cost UHD TV panels indeed gain traction in China, encouraging other panel makers to restart the product development for the 50” and under. WitsView projects the low-cost UHD TV panel is likely to become a star product focused by major panel makers, and its penetration rate will possibly attain 2% in 2014.

Figure: Forecast of UHD TV Panel Penetration Rate

Source：WitsView