LCD TV brands and OEMs revise business plans to adapt to weak sell-through market
At the same time, LCD TV subcontract manufacturers (OEM/ODM) are planning to increase their production from 3.9 million in July to 4.7 million in August, and then 5.4 million units in September. In May, the top brands missed their LCD TV set production targets by 10%, due to weaker-than-expected sell-through in the market, particularly in Western Europe and North America. To ease the inventory risk and better control over the supply chain, most TV brands are being cautious in their production plans, including Chinese TV vendors.
According to Deborah Yang, Research Director of DisplaySearch, “The slowing market demand, combined with competition for market share, has led LCD TV makers to focus on lower-cost models and price promotions in 2H’11.” Yang added, “It’s believed that price elasticity still exists in certain main regions, but LCD TV brands remain cautious in their plans. Many brands are struggling with weak sales in developed markets and are undertaking inventory clearance in Western Europe.”
Figure 1: LCD TV Brand Production Plans. Source: DisplaySearch MarketWise- LCD Industry Dynamics
May LCD TV production by the top seven Taiwan OEM makers increased by 13% M/M, which was in line with their forecast. Cost competitiveness and integrated business models are enabling OEM makers like Briview, Compal, Foxconn, Chimei Innolux, and TPV to increase orders from TV brands. In Q3’11 OEM makers are targeting 14 million, up 24% Q/Q from Q2’11.
The DisplaySearch MarketWise- LCD Industry Dynamics report delivers concise, relevant information for decision-makers who need to quickly understand the entire large-area TFT LCD supply chain. Presented in a dashboard format, this report highlights the status of every aspect of the supply chain, from components to the end-market, covering the ever-changing dynamics of panels, brands, capacity, production, prices and more.
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