Rapidly Rising Panel Prices to Impact Branded LCD TV Shipments in Upcoming Peak Season, Says TrendForce

WitsView, a division of TrendForce, reports that the global shipments of LCD TV sets in the second quarter of 2016 totaled around 48.68 million units, up 1.2% over the prior quarter. Demand generated from sporting events (e.g. the UEFA Championship and the upcoming Olympic Games) was not effective in boosting shipments as expected earlier. At the same time, traditional or established domestic TV brands in China saw a general slide in their shipments. Hence, the global shipment result showed only a very marginal quarterly growth.

“South Korean TV vendors, along with several first-tier brands, have adjusted their panel purchasing strategies due to the recent sharp increase in panel prices,” said Ricky Lin, research manager at WitsView. “They want guaranteed supply of panels regardless of cost in order to maintain high capacity utilization rates at their assembly plants and ensure the availability of products on retailers’ shelves. Their approach could cause changes to earlier price or volume agreements that they made with panel suppliers concerning the Thanksgiving holiday promotions. During this period of panel shortage, TV brands with associated panel suppliers belonging to the same group companies will have an advantage. Other first-tier vendors, by contrast, will be in a very challenging situation later this year because they usually cut prices to boost sales during the peak season.”

Hisense and TCL suffered quarterly declines of around 20% while Sony climbed to fourth place in the shipment ranking

South Korean brands Samsung and LG Electronics (LGE) retained their first and second place in the second-quarter ranking with separate shipments of 10.6 million and 7 million units. The UEFA Championship as a major worldwide sporting event did not inject significant demand into the TV market during the period as anticipated. Hence, Samsung and LGE only saw quarterly growth rates of 1% and 1.4%, respectively.

Hisense’s shipments fell 21.4% sequentially to 2.71 million units in the second quarter, while TCL’s shipments also declined 18.8% sequentially to 2.6 million units. Hisense kept its third spot in the ranking, whereas TCL fell one spot to fifth place. “In China, Internet brands began their Chinese Labor Day promotions much earlier this year and traditional domestic brands had to follow suit to protect their market shares,” said Lin. “Channels stepped up stocking up TV products in the first quarter, when promotional activities occurred in advance. This in turn caused traditional Chinese TV brands to post large shipment declines in the second quarter as their base periods for comparison had been extended.” 

With new product models hitting the market, Sony shipped 2.65 million units in the second quarter. The Japanese brand achieved a sequential growth of 10.4% and took fourth place in the ranking. The April to June period is the starting quarter of a new fiscal year for Sony, which will continue with the strategy of allocating a greater share of shipments to large-size, high-end products. Margin instead of volume is still the vendor’s focus.