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Keyword：Eric Chiou，
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2019/05/14
May 10 th sees the US-China trade dispute escalating yet again as the US continues to hike tariffs on US$200 billion worth of Chinese imports, going from 10% to 25% TrendForce points out that TVs , monitors, notebooks and other display products were not among the US$250 billion worth of goods hit by the 25% tariffs, thus the current impact on panels and the display industry remains to be fairly limited
Yet tensions amid the US-China trade war has intensified China has swiftly responded in retaliation, imposing 5%-25% punitive tariffs of its own on US$60 billion worth of goods on May 13th, Taipei Time Likewise, the US has released its 4th list of tariffs, including US$325 billion worth of China exports among the items to suffer 25% tariffs Notebooks, which make up a sizeable proportion of imports in revenue, are especially deserving of close attention
The significance of notebook PCs lies in 3 areas, and one should note that not only are the US and China both harmed by the high tariffs, but Taiwan is also caught up in the storm First of all, nearly 90% of notebook PCs imported to the US are assembled in China, with Chongqing as its main industrial city for these products Lacking other production bases of similar scale with highly integrated supply chains for flexible procurement, China will suffer a terrible hit in exports should punitive tariffs begin to fly
Secondly, the North American notebook PC market is highly reliant on domestic brands in the US According to TrendForce's global shipment statistics for notebook PC brands 2018, American brands HP, Dell and Apple's market shares combined comprised up to 66% of the entire North American market Looking at it from another angle, shipments for the North American market took up 40~50% of total shipments and formed the main source of business for each of the three giants If tariffs are imposed on notebook PCs, American brands will begin to lose competitive power due to elevated costs from tariffs, impacting both business and profits If the tariffs reflect themselves in the end prices for notebook PCs, then there will be good reason to worry whether the North American market, which comprises up to a third of global notebook PC shipments,will suffer from a stifled sales momentum Should that come to pass, it shall be mayday for both American notebook PC brands and the global notebook market
Lastly, Taiwan's suppliers have long accumulated competitive power in and concentrated on notebook PC manufacturing The three aforementioned American brands all depend 90% on Taiwan's suppliers If punitive tariffs become unavoidable, Quanta, Compal and Wistron may become another center of impact in this disaster Some notebook PC ODMs have expanded their production capacities in Vietnam, Taiwan and other locations outside China since 2018 in an attempt to minimize the potential impacts from tariffs Although the change in places of production may circumvent the tariffs, notebook PC supply chains have long been situated in China Shipping the relevant upstream components to new plants overseas of China will incur additional fees and time costs, thus leading to an inevitable overall increase in cost despite the tariff work-around
TV Brands to Reshuffle by Market Share and Scale if Tariffs Hit Hard
In TV markets, having TVs made in Mexico and shipped to America for sale have always been the business model for years under considerations of tariff-related incentives and logistic costs Taking the current top four TV brands by market share for example, we see that Samsung and LG have enormous production capacities in Mexico, allowing the two Korean manufacturers to circumvent the towering tariffs on China imports with ease, thanks to the additional resources at hand
In contrast, Chinese brand TCL, catapulted by sharp price strategies, and Vizio are still highly reliant on China manufacturers for production Although TCL possesses some capacity in Mexico, it is only enough for 50% of US demand That is to say, once TVs are included in the list of products to suffer punitive tariffs, a reshuffling of brands by brand strength and market shares shall ensue
2015/12/03
The largest Chinese LCD panel maker, BOE Technology Group (BOE), formally announced on December 2 that it is commencing the building of its Gen-105 LCD panel fabrication plant in the Chinese city of Hefei With the construction of the Hefei fab underway, major Japanese panel maker Sharp will find its days as the manufacturer of the largest LCD panels numbered For more than six years, Sharp has led in generation technology with its Gen-10 fab, which is located in the Japanese city of Sakai and has been in operation since July 2009 BOE is poised to surpass this record with its future Gen-105 fab, which is scheduled for mass production in the second quarter of 2018 and will have a capacity reaching 90,000 pieces of glass per month Mainstream Gen-85 fabs process glass substrates sized 2,500 x 2,200 mm The Hefei fab by contrast will be capable of processing glass substrates that reach 3,370 x 2,940 mm, representing an 80% increase in area
BOE plans to allocate the production of 65- and 75-inch super-large TV panels to its Gen-105 fab “Market demand for large TV panels has soared in recent years mainly because the pricing of TV sets has become more competitive, making super-large TVs the first choice for consumers looking for replacements,” Eric Chiou, senior research director at WitsView, a division of TrendForce According to WitsView, 65-inch-and-above size segment accounted for less than 06% of the TV panel shipments worldwide in 2014, totaling at 15 million pieces This year, the share of this segment is projected to expand to 25% and pieces shipped will surge by three and a half fold to 68 million Shipment forecast for 2016 is at 83 million pieces and the market share within the TV application will rise further to 3%
BOE’s Gen-105 fab will be able to produce eight 65-inch LCD panels from a single piece of glass substrate The leading Chinese panel maker expects that more economical panel-cutting process will lead to a significant gain in shipment volume that could offset its disadvantage of being the late market entrant Moreover, BOE’s fab investment takes advantage of the rising market acceptance of large-size TVs in China and will help the company take a sizable market share in this segment
2015/10/21
October not only has brought refreshing autumn air but also positive news on the display panel industry According to the latest price report by WitsView, a division of TrendForce, TV panel shipments have been steady to the third quarter of this year In the monitor panel market, rush orders from vendors for the year-end sales have returned Notebook sales are also slowly picking up due to promotional activities Nonetheless, these positive signs have not significantly eased the industry’s concerns over the looming oversupply problem and market has remained downbeat for this month
Eric Chiou, WitsView senior research director, said that TV sales during China’s National Day holidays were weak and did not provide an opportunity to turn the TV panel market around With much of the capacity being used in TV panel production, there are rising worries that panel suppliers will face both oversupply and weak demand in the TV application To address this imbalance, suppliers are stepping up their efforts to lower their TV panel inventories as well as finding ways to maximize these products’ margins Hence, TV panel prices have taken a dive due to the combination of aggressive shipments and price slashing
The TV panel market remains depressed this month with prices declining across all size segments The 32-inch segment has fallen by about US$2~3 on average Even though 32-inch TV panels from some suppliers are now sold below their cash costs, their prices might drop further to the US$60 threshold next month if the industry does not significantly adjust its overall capacity utilization The 395- and 43-inch segments have fallen by US$7~8 due to increasing oversupply Likewise, inventory pressure continues to build in the 48- and 49-inch segments, which has seen a decline of US$8~9 Demand for both 55- and 65-inch panels fades as TV vendors are finishing stocking up for the year-end peak season Prices in these two segments have dropped by more than US$10 this month
In the monitor panel market, quote prices for small-size panels (185-, 195- and 215-inch segments) have fallen through their cash costs in October Their prices are likely to keep falling in the short-term despite some suppliers’ efforts While monitor panels with higher dealing prices are still subject to negotiation between suppliers and buyers, prices in general are consistent with the market downtrend Price decline for products that quoted below the market average is also starting moderate Small-size segments have seen decline widen by about US$1~3 For 23- and 24-inch panels, their prices have fallen by around US$2 on average due to the intense price competition among few dominant suppliers
In the notebook panel market, prices of mainstream TN HD panels in the 156-, 14- and 116-inch size segments have fallen to a low of US$25~26 in October after suppliers slashed their prices repeatedly to undercut each other in the first half of this year While price bargaining for TN HD panels has paused on the supplier as well as the buyer side, heated negotiation continues on the prices of the higher-end FHD and IPS panels For suppliers, FHD and IPS products consume more of their capacity and have better margins compared with TN HD products They therefore are willing to lower the prices of FHD and IPS panels to make them more competitive against HD panels and to boost their shipments Branded notebook vendors on the other hand want to raise the specs of their notebook systems with high-end panels This will catch consumers’ attention and generate sales Hence, the 156-inch FHD panels may see the largest price drop compared with other notebook panels this month owing to efforts of suppliers, with decline reaching US$1~15
2015/08/21
The latest panel price report from WitsView, a division of TrendForce, says though the warm summer months are the traditional peak season for IT and TV products, display panel makers have been struggling to keep up their prices IT panel demand remains weak in August, while the TV panel market has witnessed a larger price decline compared with the prior month because of concerns about end market sales and rising inventory level Aggressive efforts from panel makers to retain their orders also have contributed the falling TV panel prices
“Panel makers’ main goal right now is to maintain high shipment volume and protect market share,” said Eric Chiou, WitsView senior research director “Since they are not planning to adjust their panel production in the short term and new capacities are setting up in China, the oversupply problem will worsen Furthermore, the TV panel market has become increasingly conservative about TV set sales due to the reduced scales of upcoming promotional events and the slow pace of the global economic recovery All these factors have created a buyer’s market with lots of noises in price dealing”
WitsView’s survey of August TV panel prices shows the average quote price for the 32-inch has fallen close to the US$70 threshold even as panel makers are maintaining high capacity for this segment The top two Chinese panel makers have cut prices for the 32-inch products in order to match their South Korean rivals, which have been using their cost advantage to undercut competitors Prices of panels sized from 40 to 43 inches fell by US$3~5 in August The entry of Chinese challengers into these segments has led to mounting pressure to reduce prices as well The 48- and 49-inch panels, which are the main products rolling out of Gen 85 plants, have seen a price drop of US$6~8 resulting from falling stock up demand and rising inventory level The downtrend in the 48- and 49-inch has in turn affected the prices of the 50-inch panels, which have been reduced by the corresponding amount in order to stay competitive Larger TV panels, including those sized 55 and 65 inches, are seeing fiercer price war in August with the estimated decreases for Full HD and UHD products exceeding US$10
In the monitor application, panel makers aim to achieve their shipment targets and reduce excess inventories for certain sizes in face of low stock up demand that is associated with the lackluster end market sales Prices for monitor panels therefore has kept dropping in August with some sizes having greater rooms for negotiations The average decline for the 238- and 27-inch panels has been around US$2, while smaller sizes such as the 195- and 185-inch are estimated to have fallen by US$1~15
The notebook panel market has also been affected by the flat end market demand and lack of progress in inventory reduction for both panels and notebook computers Consequently, panel makers are unable to continue to negotiate prices based on volume, a practice that was prevalent in the prior two quarters Though quote prices for mainstream 156-inch and 14-inch notebook panels are near their cash costs, they are projected to have fallen by US$1~12 in August Other sizes, including 116- and 173-inch segments, are estimated to have dropped by about $US1 in connection with falling demand Oversupply and high inventory level have beaten down notebook panel prices for more than half a year WitsView expects this downtrend will not moderate in the short term until these two problems have been resolved
2015/07/21
The latest price report by WitsView, a division of TrendForce, indicates display product vendors have been reducing their panel purchases with their respective suppliers in order to force a greater general price concession from panel makers However, vendors (Chinese or international brands) will be limited in their efforts to correct their panel purchases in the third quarter because they are also preparing for the traditional peak season On the other hand, panel prices are starting to drop in face of two kinds of pressure – increasing price negotiations and rising channel inventories WitsView therefore expects prices for panels of all sizes to drop very soon
“Sensing that demands are slowing, panel makers have recently started to adjust their product mixes,” said Eric Chiou, WitsView’s senior research director Panel makers have limited options, such as shifting notebook panel capacity to produce monitor panels, since notebook panels have the highest inventory level Panel makers can also switch from producing for IT applications, which have the weakest demand, to producing TV panels
Chiou added: “The market is being affected by oversupply pressure because industry’s overall capacity utilization rate is high and the Chinese panel makers have accelerated their capacity expansion efforts Consequently, prices of IT panel will see further decline and the TV panels will not be able to maintain their prices”
In July’s TV panel market, the 32-inch panel’s oversupply problem has grown instead of subsiding Furthermore, the 32-inch end products are almost at their base prices Vendors therefore have kept lowering their demands as they have difficulties maintaining profit According to WitsView, the average price decline for the 32-inch TV panel during this month has reached US$3~4 Quote prices remain relatively stable for panels sized between 40 and 43 inches However, some products in these categories have seen their prices negotiated downwards by about US$1 this month For 48- and 49-inch TV panels, their prices have fallen by US$2~3 Capacities for these two sizes continue to increase Moreover, vendors have slowed down their purchases because their existing inventories are sufficient The price decline of the 48- and 49 inch panels has also affected the prices of the 50-inch panels, which have dropped by US$2 this month
The LCD monitor shipments in the second quarter had a 04% dip compared with the previous period, and the room for shipment growth in the third quarter will be just between 4~6% since the coming peak season will be relatively weak The supply of monitor panels will continue to increase and make the estimated average price decline in July greater than that of June WitsView projects a decrease around US$2 on average for various-sized monitor panels
Though July is the traditional peak season for notebooks, demands are not picking up Some panel makers have shifted their notebook capacities to other applications, but this does not alleviate the inventory glut that is hurting the notebook market right now The price decline for the mainstream 156- and 14-inch panels is expected to moderate this month as their prices are very close to the base The 116-inch notebook panels will continue its downward price trend owing to the constant market disruption by white-box module house that offer extremely low prices WitsView estimates the 116-inch notebook panels to have an average price decline reaching US$1 As the oversupply problem continues, panel makers will be forced to choose between price and volume and their negotiations with product vendors will become more difficult
Please visit WitsView’s website at wwwwitsviewcom to get the latest information on price quotes for display panels
