China Top 6 TV brand shipments slump by 19% MoM in May11
According to the latest TV set shipment and TV panel demand survey by WitsView research division of TrendForce and Σintell research company , China’s Top 6 TV brand vendors purchased a total of 3.174 million TV panels in May11, up by 5.3% MoM. Meanwhile, their TV set shipments during the same month amounted to 2.643 million units, down by 19% MoM.
In terms of the 2011 global LCD TV shipment forecast, WitsView research director Burrell Liu indicated that their initial assessment in early 2011 was 225 million. It was subsequently revised downward to 215 million units. Based on the current market trend, he believes the figure will likely be revised again, down to roughly 204~207 million units. Compared to last year’s 182~185 million TV set shipments, the annual growth in 2011 will be a mere 11%. The reasons behind the worse-than-expected shipment forecast are attributed to the following reasons:
1. Due to the end of the Eco Point Initiative program and the devastating impact from the March 11 earthquake, the market demand in Japan has slowed.
2. The turnaround in the global economy has not been as strong as previously expected. Coupled by the Greece debt crisis, the overall market confidence has evidently weakened. This had made it much more difficult for the brand vendors to attain their 2011 annual shipment targets that were announced during early 2011.
3. The turmoil in the Middle East and North Africa triggered a sharp increase in oil prices. Coupled by the price jump for corn, cotton and other raw materials caused by bad weather, the resulting global inflationary increases have affected consumer confidence.
4. The rising popularity of tablet PCs has increased the desire of consumers to buy products that are more fashionable and novel. Sales of products that do not have such characteristics have grown more sluggish.
In sum, compared to last year, the 2011 global market share of China’s TV brand shipment will likely continue to stay at a steady 20%. Meanwhile, WitsView projects that the TV set shipments from China’s Top 6 TV brands will reach approximately 38 million in 2011 (2010: 33.5 million).
2. Shipment-wise
In May11, the aggregated shipments from China’s top 6 TV brand vendors declined by 19% MoM (Table 1) to 2.645 million. Excluding Haier, who was still able to post a whopping 54% monthly shipment increase, the remaining five players all registered a sharp monthly decline. The market share of the top 3 brand vendors were as follows: Hisense (25.4%); TCL (17.2%); Skyworth (16.6%). Separately, the LED TV shipment ratio of China’s top 6 TV brand vendors continued to exceed 40%, marking the third consecutive month. It is expected that by the end of the year, LED TVs will take up roughly 47~50% of their total TV shipments, even higher than the 40~43% ratio of other global TV brands.
Table 1: China Top 6 TV Brand Shipment Record-May(unit)
(1)LED shipment performance
Amid the announcement of China’s Flat Panel TV energy efficiency standard, compensative is now being provided to retail stores. This has further stimulated the demand for LED TVs. Yet, after the Labor Day holidays, a drop was witnessed in both the market demand and relevant sales promotions, thereby driving down the total LED TV shipments from China’s top 6 TV brand vendors to 1.072 million units, down by 2.1% MoM. The figure accounted for 40.6% of the total TV shipments. The main LED TV shipment sizes were centered on the 32”, 42”, and 46”. In May11, Hisense shipped the most LED TVs, reaching 250.1 thousand units. However, this only accounted for 37.5% of its total TV shipments. On the other end, Changhong shipped the least amount of LED TVs, attaining a mere 13.1 thousand units, taking up 40.2% of its total shipments.
(2)Size performance
Size-wise, the shipment ratio of the below 26” segment from China’s top 6 TV brand vendors was 20.5%, up by 0.4 percentage points from last month. The 24”, which saw the highest amount of shipments, held an 8.4% ratio among the below 26” portion. As for the above 32”, such products grabbed a ratio of 79.4%. The bulk of shipments continued to go to the 32” size, where it rose by another 1.5 percentage points to 42.34%. This was followed by the 42” (16.4/%), the 37” (7.4%), and finally the 26” (7.1%).
Table2: China Top6 Brand TV shipment breakdown by size share(unit)
(3)Shipment volume distribution in China and overseas market
Shipment volume in China: 1.843 million units, 8.8 thousand units less than during Apr11.
Shipment volume in overseas region: 790 thousand units, up by 48.1% over Apr11. Despite the ratio increase, the jump was due to the changes in the shipment structure after the Labor Day holidays.
Meanwhile, the shipment ratio between China and the overseas market was 69.7% to 30.2%. In comparison to the 83.5% and 16.5% ratio back in Apr11, the LCD TV shipments from China’s top 6 brand vendors in the local segment grew slower, possibly due to weaker demand after the Labor Day holidays or a gradual build-up in inventory levels. Thus, the jump in the overseas market did not reflect an actual shipment volume increase. It is worthy to keep a close eye on how this trend develops.
2. Panel demand wise
Table 3 shows the major panel makers’ respective share among China’s top 6 TV brand vendors. Chimei was ranked No. 1 with a 29.3% share. Coming in second was LGD, with a 27% share. As for Samsung and AUO, they respectively garnered a 20.5% and 17.6% share. In terms of the China market, the Taiwan and Korean players were relatively evenly matched. As mentioned earlier, the standardization in China’s Flat Panel TV energy efficiency provided a boost to the LED TV demand. In May11, the combined share of LGD and Samsung among China’s top 6 TV brand vendors was 61%. AUO and Chimei each respectively grabbed a 21% and 16% share. Finally, LGD and Samsung were the two key suppliers of 3D panels, capturing a share of 74% and 11.5%, respectively.
Table 3:Share rate by panel makers(unit)
Conclusion
In general, the global LCD TV demand in 2011 has been weaker than expected. Many international TV brand vendors have revised downward their shipment targets several times. Only China’s TV brand vendors have been able to continuously maintain a 20% global share. Still, although sales during China’s Labor Day holidays had met expectations, the shipment figures of the top 6 players after the holidays reveal that demand is slipping. By further observing their shipment ratio change between the local and overseas market (83.5%:16.5% in Apr11 to 69.8%:30.2% in May11) it further illustrates that the China TV demand in May11 may be slowing. This weakness could be an indicator that the demand momentum in China is becoming shakier or that inventory levels are starting to rise. One should not be fooled that the jump in the overseas shipment ratio was due to a stronger market demand.
In May11, in the price negotiations with China’s TV brand vendors, panel makers sought to raise their panel price quotes in an attempt to drive up the overall TV panel prices. Although China’s TV brand vendors hold a relatively strong market position, their 20% share still pales against the remaining 80% that is commanded by the other international players. By merely focusing on the China market and ignoring the sluggish market conditions of other regions would produce little effect on the general panel price trend. Coupled by China’s TV set shipment drop in May11, it is expected that the momentum behind an increase in the TV panel price will not be strong. Aside from the macroeconomic factors that are beyond control, panel makers need to carefully study on how to aptly control their production capacity in order to keep the demand and supply on a more balanced state. Only by doing so, will they be able to better prevent panel prices from falling down again.
