Major Chinese TV Brands Expand Market Share with Strategic Supply Chain Integration and Regional Diversification
January 4, 2024 | TrendForceEstimated reading time: 3 minutes
Global TV demand continues to be adversely impacted by inflation in 2023. Even price reductions and promotions on high-priced products have struggled to boost sales as consumers contend with limited disposable income. This has resulted in a decline in shipments for international brands that primarily focus on mid-to-high-end models, according to TrendForce's research.
TrendForce points out that only Hisense and TCL—leveraging their cost advantages—have managed to defy this trend, achieving over 10% growth in shipments. Their market shares have also increased to 13.8% and 12.9%, respectively.
TrendForce indicates that the current surplus in TV panel production capacity, coupled with sluggish demand, necessitates effective management of supply chain resources from upstream to downstream. This is essential not only for enhancing production efficiency and reducing costs but also for the key expansion of market share for panels, brands, and OEMs at present. Furthermore, this vertical or horizontal integration within the supply chain forms a fundamental component for the sustained growth in shipments for TV brands and OEMs going into 2024.
In 2023, the top five brands achieve a landmark 62.3% market share; “The bigger the better” trend poised to continue into 2024
A significant rise in TV panel prices in 2023 has led to differentiation among brands becoming increasingly stark. The top five brands—Samsung Electronics, Hisense, TCL, LG Electronics, and Xiaomi—are estimated to achieve a combined market share of 62.3% for the first time. Additionally, generic brands have seen an approximate 9.1% annual growth in shipments as they claim a 16.7% market share. This growth is primarily attributed to North American channel brands launching low-cost TVs since 2H22, a strategy that draws consumers in with initial purchases and encourages subsequent purchases.
However, global TV shipments are expected to fall by 2.3% in 2023, heavily impacting brands with shipments below 6 million units, particularly those shipping less than 3 million units, who may face even tougher operational challenges.
TV brands reorganize supply chains: Cost optimization emerges as key to success in 2024
Historically, giants like Samsung and LG Electronics have enjoyed the backing of their group’s panel makers, swiftly increasing their market share and securing a dominant market position. However, the massive expansion of Chinese panel production capacity and the resulting price competitiveness have led Korean panel makers to exit the supply chain under loss pressures, forcing Korean TV brands to pivot towards collaborations with other panel makers, including an increased reliance on Chinese panel makers.
Nevertheless, as Chinese panel makers assume a greater role in the global TV panel supply, their bargaining power with brands is also on the rise. TrendForce's survey for 2024 predicts Samsung Electronics will significantly reduce its dependency on Chinese panel makers, dropping its procurement share from 55% to 38%, while other brands will continue to source over half of their panels from China.
TV panels (open cell) represent about 45–60% of the total production cost of a TV set. In the context of sustained weak market demand, panel makers may adopt strategies of production control and price maintenance to ensure operational stability. Consequently, TV brands, OEMs, and ODMs can only mitigate costs by optimizing electronic components like backlight units, mechanical components, mainboards, and power boards.
Hisense and TCL, boasting in-house factories both domestically and internationally, are continuously increasing their share of domestic component suppliers to control production costs optimally, thus enhancing the sales competitiveness of their brand products. Additionally, TV OEMs, and ODMs like MOKA, BOEVT, and HKC are expanding their business footprint. By forming strategic alliances with group panel makers and moving into overseas markets like Mexico and Vietnam, they are saving on import tariffs to the US and Europe, while simultaneously securing more orders.
Suggested Items
TTM Technologies to Exhibit at the 2024 International Electronics Circuit Exhibition in Shenzhen, China
12/04/2024 | Globe NewswireTTM Technologies, Inc., a leading global manufacturer of technology solutions including mission systems, radio frequency (RF) components and RF microwave/microelectronic assemblies and printed circuit boards (PCBs), announces that it will exhibit at the 2024 International Electronics Circuit Exhibition (Shenzhen).
Confidee Achieves ISO/IEC 27001:2022 Certification: Strengthening Information Security and Compliance
12/04/2024 | CONFIDEEConfidee, the world´s leading PCB Regulatory Technology company, proudly announces its achievement of the ISO/IEC 27001:2022 certification. This achievement further demonstrates Confidee´s commitment to delivering compliant PCBs according to industry standards and regulations.
Flexible Electronics Market to Reach $75.04 Billion by 2032
12/03/2024 | Globe NewswireThe SNS Insider report indicates that,“The Flexible Electronics Market Size was valued at USD 32.65 Billion in 2023 and is expected to reach USD 75.04 Billion by 2032 and grow at a CAGR of 9.72% over the forecast period 2024-2032.”
Foxconn Showcases Satellite Technology and Industry Ecosystem at TASTI 2024
12/03/2024 | FoxconnHon Hai Technology Group (Foxconn) participated in the 2024 Taiwan Space International Annual Conference (TASTI 2024) being held November 30 - December 4, 2024, showcasing its latest advancements in low-orbit satellite communications and its commitment to building a robust satellite industry ecosystem.
IPC Announces Two New Courses to Enhance Electronics Manufacturing Excellence
12/03/2024 | IPCIPC is excited to announce the launch of two new courses designed to optimize electronics manufacturing processes: "Ensuring Excellence: IPC-J-STD-001 Process Optimization" and "Ensuring Excellence: IPC-A-610 Process Optimization."