TrendForce：China Panel Makers Coming with Force, A Major Threat for Taiwan Panel Makers

According to the “6 Major Television Brands Shipping and Panel Purchase Report of China in July” published by WitsView, the Dispaly research division of TrendForce, and Σintell, the shipping MoM growth rate of the 6 major Chinese television brands in July reached 20% to 3.772 million units, after two months of consecutive inventory adjustments from May and June while the shipping in August is anticipated to grow by 11%. On the other hand, the total purchase volume of television panels for the 6 major brands in July was 3.955 million units with monthly growth of 10.9% and continuous growth is expected in August with a MoM up to 16%.

The director of WitsView Burrell Liu states that the main reasons which stimulated the growth of shipping volume and panel purchase in July for the 6 major Chinese brands are: 1) the new government policy that became effective on June 1st which promotes energy saving products that benefit the general public, resulting in the increase in new models inventory preparation which targets the holiday period between the Moon Festival and October 1st National Day, while August and September are also peak seasons in terms of exports; 2) The panel price in the third quarter remains stable and even shows a slight growth, which triggers motivation for fore planning of inventory. 

The shipping infiltration rate of the LED TV produced by the 6 major brands in July was as high as 74.6% with the overall infiltration rate reaching 70.5% for the months between Januarys – July. It is estimated that the annual infiltration rate for the 6 major Chinese brands will achieve 80%. The shipping volume of New Chimei in July still leads the way with a 27.1% market occupancy rate; AUO settles at second with 20.2%; while LG and Samsung trailing behind at third and fourth place with 14.6% and 13.1 % respectively.

One thing worth mentioning is the shipping volume of BOE and CSOT in July, which increased by 11.6% and 8.9%. Both BOE and CSOT relies on its domestic advantages as panel manufacturers and its market occupancy rate in the first quarter was 5.6% and 4.5%, which gradually inclined to 8.6% and 8.7% in the second quarter. BOE and CSOT both succeeded in achieving the 1 million units shipping milestone and both benefits from Chinese domestic brand manufacturers and even from the two major Korean manufacturers. The estimated shipping volume of CSOT in August is 1.3 million units, of which over 700K and more are for the 6 major Chinese brands and its shipping to Samsung increased to about 300K. The overall shipping volume of television panels in September is estimated to reach 1.4 million units and will jump ahead to become the head of the Chinese LCD panel supply chain. On a side note, its shipping of 32” panel to the 6 major brands has became No. 1 starting from April. It has also aggressively engaged in the development of 55” and 110” high resolution (4K2K) panels, it is truly a company that cannot be ignored. (See table 1).

Table 1. Ratio of Panel Purchase for the Top 6 Major Chinese Television Manufacturers

Source：WitsView

According to WitsView, with the boost of the policy for energy saving products that benefits the general public, the products are starting to reach store shelves for the Moon Festival and National Day but the actual sales result will have to wait until after October 1st. If sales fall short of expectations, the panel manufacturers should plan its production according to the slow season and adjust the direction of its customer strategies as early as possible. It is certain that Chinese panel manufacturers will become stronger in its own market, plus the two Korean exportation ports, the future of all Taiwanese panel manufacturers will face aggressive competition like soaring heats and must find a way to survive.