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Top Chinese TV makers post 12.5% MoM growth

Posted: 30 Sep 2011 ?? ?Print Version ?Bookmark and Share

Keywords:LCD TV? LED TV? oversupply? TV shipment?

The growth of Chinese TV shipments have been attributed to the weak market demand last year, price cutting promotions in July and the follow up stocking for the holidays. WitsView, a research arm of TrendForce Corp., and intell, a Chinese research institute, have revealed that the top six China TV brands shipment have increased to 2.924 million units in July with a MoM growth of 12.5 percent and YoY growth of 33.7 percent.

WitsView has modified the worldwide LCD TV demand to 201.4 million units this June, and the latest number has indicated a YoY growth of seven percent of overall demand. Due to the current global economic status and the fact that 'house appliance to the countryside' subsidies will be gradually terminated (three provinces by year-end 2011 and nine provinces in 2012), the growth in China is expected to drop from 15 percent this year to 10 to 12 percent in 2012. The overall growth of worldwide LCD TV next year will be around 7 to 10 percent. On a side note, the LCD TV panel procurement has been sliding to 2.79 million units with an MoM regressed demand of 8.2 percent.

July shipment status for top six brands
WitsView assistant VP, Burrell-Liu, stated that the July shipments for the top six Chinese brands showed TCL leading with 25 percent growth, followed by Changhong's 16 percent. Hisense increased its shipment by 15 percent, while Skyworth and Konka increased by 13 and 6.5 percent, respectively. Meanwhile, Haier suffered the sole drop of 13 percent. In terms of the July shipment ratio for all brands, Hisense is ranked first with 25 percent of shares followed by TCL's 21 percent and Skyworth's 19 percent. Haier's market share dropped to 8.5 percent, ranking last. Notably, Hisense, TCL and Skyworth ranked from numbers 8 to 10 among the top 10 global LCD TV brand market shares (Table 1).

Global LCD TV shipments

Market shares of global LCD TV shipments in 1H 2011 (Source: WitsView)

The penetrations rates for six LED TV major brands in July are about 48 percent, while that of LED TV from January to July is nearly 40 percent. According to WitsView, the overall LCD TV penetration rate is about 42 percent as compared to the average rate among top six brands in China of roughly 45 percent.

The domestic and international shipment ratio between January and July for the six major brands was about 76 to 24 percent. The shipment ratio between China and international markets was about 73 to 27 percent. In July, there was an MoM growth of both shipment ratio and shipment quantity of domestic market for the first time since May, and the high level has been maintained for export.

July panel procurement status for top six brands
In July, CMI accounted for 38 percent of the shipments of the top six panel brands and maintained the leading position for three consecutive months with a YoY growth of 56 percent and MoM growth of 13.5 percent. LGD ranked second with 24 percent of total shipments (regressed 16 percent from the previous month). AUO and Samsung ranked third and fourth with market shares of 17 and 15 percent, respectively. As of July this year, CMI and LGD have secured first and second place with 29.5 and 29.2 percent, respectively. SEC took 17.7 percent of shares, while AUO, 17.2 percent.

Liu added that with the upcoming Mid-Autumn Festival and National Day holidays in China, the overall shipments are estimated to grow by 19 percent. Despite the anticipated increase, the top six brands must carefully control their TV and panel shipments with a current inventory of six weeks. Moreover, while market demand in China has been relatively robust compared to other parts of the world, the country only accounts for about 20 percent of the global market. This is hardly enough momentum to drive the demand and other international brands in the remaining 80 percent of the market.

WitsView has also estimated the global LCD TV growth at around 15 percent in both Q3 and Q4. This number may appear decent, but it has been modified several times with reduced demands. With the excessive production capacity, the growth barely alleviates the oversupply situation and price decline.

From the suppliers' perspective, Korean makers maintained about 80 percent of average utilization rates, after taking into consideration their customer bases and marketing strategies. The reduction of utilization rate is necessary to prevent further price decline and to maintain a balance of the overall production and sales. The price decline can only be stopped if Taiwan makers reduce their production capacity to 50 percent such as in 2008. However, a consensus in reduction among panel makers is necessary for prices to stabilize both in Q4 and in the future.

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