Leading TV Brands More Reliant on Chinese Manufacturers in 2015
June 22, 2015 | IHSEstimated reading time: 3 minutes
TVs made by outsourcing specialists are expected to reach an industry record of 43 percent of LCD TVs shipped globally in 2015, according to IHS Inc. the leading global source of critical information and insight. Outsourcing manufacturing has become one of the most important business strategies for TV brands, because it can improve supply-chain cost management and increase time-to-market business opportunities.
“A major driving force behind TV outsourcing is the constraint on TV panel supply, which can cause TV brands to increase their outsourcing from vendors who are able to secure a stable and competitive panel supply,” saidDeborah Yang, director of display supply-chain analysis at IHS.
LCD TV panel supply was tight in 2014, particularly for the mainstream 32-inch size, so top TV brands used TV subcontract manufacturers in China. BOE and TCL were chosen for their semi-set outsourcing and original equipment manufacturing (OEM) TV production in the first quarter (Q1) of 2015. “Both BOE and TCL have direct access to 32-inch panel supplies from their captive panel makers, which is welcome news to Chinese TV makers looking to not only grow their branded TV businesses, but also to expand their businesses with TV brands globally,” Yang said.
According to the IHS Quarterly LCD TV Value Chain & Insight Report, leading Korean TV brands plan to maintain or lower their in-house backlight-module-system (BMS) capacity and production in overseas factories, as they use their captive capacity for more mainstream products and for the production of 4K resolution, curved screens, wide-color gamut (WCG), and other high-end product features.
Most TV brands selling low-cost entry-level products plan to increase their outsourcing from vendors in Taiwan and China,’ Yang said. “Japanese TV brand business models are more complex, as they also license their brands to subcontract manufacturers. It is likely that other struggling TV brands may copy Japanese business models, in order to survive in the market.”
Since late in the third quarter (Q3) of 2014, leading global TV brands have been lowering TV retail prices to aggressively pursue market share. They are therefore wielding greater influence over the panel supply, causing panel makers to list them as first-priority customers.
Samsung, LGE, Sony, and other leading TV brands with a captive panel supply and a competitively strong panel-supply base continuously gained market share last year. While concerns have been raised about another panel shortage in 2015, top TV brands have been able to secure the TV panel allocations they need, in order to meet their ambitious annual targets. “This situation has put pressure on profit margins throughout the TV supply chain, which will also stimulate the LCD TV subcontract manufacturing business,” Yang said.
The IHS Quarterly LCD TV Value Chain & Insight Report maps the relationships between LCD TV brands, OEMs and panel suppliers with actual shipment and business plans as well as LCD TV supply chain intelligence information. For information about purchasing this report, contact the sales department at IHS in the Americas at (844) 301-7334 or AmericasLeads@ihs.com; in Europe, Middle East and Africa (EMEA) at +44 1344 328 300 ortechnology_emea@ihs.com; or Asia-Pacific (APAC) at +604 291 3600 or technology_APAC@ihs.com.
About IHS
IHS is the leading source of insight, analytics and expertise in critical areas that shape today’s business landscape. Businesses and governments in more than 150 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs about 8,800 people in 32 countries around the world.
Suggested Items
Europlacer Presents New Range of iineo SMT Placement Machines.
05/01/2024 | EuroplacerFor more than 15 years, the Europlacer iineo placement machines have made their mark on the SMT industry with unique features and unrivalled flexibility. Today, Europlacer announces the launch of the second generation iineo.
Incap US Hosts Annual Food Drive
04/30/2024 | IncapIncap US recently concluded its annual food drive, a tradition aimed at supporting the Greater Washington County Food Bank. This year marked the fourth year of the initiative, and we couldn’t be prouder of the collective effort that was made to its success.
Scanfil Uses Employee Engagement Survey to Improve
04/30/2024 | ScanfilOnce a year Scanfil arranges Employee Engagement Survey (EES) in order to get valuable insight from its employees. In EES all employees are invited to share their opinion, bring ideas for improvements, and contribute to making Scanfil a better place to work.
epoxySet Introduces EO-20E – Versatile, Electrically Conductive Epoxy
04/29/2024 | epoxySetepoxySet produces EPOXIOHM EO-20E an industry established, reliable electrically conductive epoxy designed for solder replacement, chip bonding and other intricate electronic and optoelectronic assemblies. This creamy paste has a an easy to use 1:1 mix ratio with a 48 hour work time.
The Right Approach: I Hear the Train A Comin'
04/25/2024 | Steve Williams -- Column: The Right ApproachTraining is often an afterthought in many organizations, and the longer a company has been in business, the more this seems to apply. Over the past couple of decades, it has been amazing to observe that the biggest offenders of this are the companies that overuse the sound bite, “Our most important assets are our people.” When you dig into the process and peel back the onion, their commitment to training is not commensurate with that statement.