TV Makers See Brighter Future
SANTA CLARA, CA — Despite a tepid year to date, TV makers are upping their third-quarter production plans to meet expected late-year demand.
Many top brands have been rapidly lowering their LCD business plans, acknowledging that end-market demand is below expectations. However, TV brands and OEM/ODM makers are still planning to increase third-quarter production to meet demand for the upcoming holiday season. According the latest DisplaySearch report, combined production plans for the top 16 LCD TV brands will increase from 14.4 million in July to 16.9 million in August, and then 19.4 million in September. At the same time, LCD TV subcontract manufacturers (OEM/ODM) are planning to increase production from 3.9 million in July to 4.7 million in August, and then 5.4 million units in September.
Figure 1. LCD TV brand production plans. (Source: DisplaySearch)
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.
“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 the second half,” said research director Deborah Yang. “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.”
May LCD TV production by the top seven Taiwan OEM makers increased by 13% month over month, in line with forecasts. Cost competitiveness and integrated business models are enabling OEMs like Briview, Compal, Foxconn, Chimei Innolux and TPV to increase orders from TV brands.
OEMs are targeting 14 million units in the September quarter, up 24% sequentially.
