South Korean and other foreign display panel manufacturers have decreased their supplies of TV LCDs that are supplied to Samsung Electronics and LG Electronics. On the other hand, supplies for Chinese TV manufacturers have increased a lot. It is expected that panel businesses’ major customers will be centered on Chinese TV manufacturers. [Picture 2]
According to stock firms and display industry on the 21st, major panel manufacturers such as Samsung Display, LG Display, BOE, CSOT and others have decreased amount of supplies of TV LCDs for Samsung Electronics and LG Electronics by more than a digit since last December. Samsung Display and LG Display whose supplies for Samsung Electronics and LG Electronics are greater than other manufacturers have decreased their supplies by more than those manufacturers.
BOE’s amount of supplies for Samsung Electronics had been greater than other manufacturers as percentage of LCD panel supplies was over 20%. In December however, percentage fell to 10% which is half of the percentage in October. Considering that percentage of supplies for LG Electronics exceeds 10%, proportion for Samsung Electronics has become lower than proportion for LG Electronics. Samsung Electronics is one of BOE’s biggest customers.
Although CSOT’s supplies for Samsung Electronics had increase by small amount from 20% in October to 22 to 23% in November, it had decreased again to 20% in December.
Taiwanese panel manufacturers also have decreased their supplies for Samsung Electronics and LG Electronics. Proportion of Inolux’s supplies for Samsung Electronics has decreased from 20% to middle of 10%. Although it had maintained its proportion for LG Electronics to 7 to 8% in November and December, its proportion for Samsung Electronics has decreased from about 20% to middle of 10%.
LG Display and Samsung Display also have rapidly decreased their supplies for LG Electronics and Samsung Electronics respectively.
Although LG Electronics had received 40% of its supplies from LG Display in October, this number had fallen to 25% in December. Samsung Electronics’ proportion of supplies from Samsung Display had decreased from later end of 30% in October to less than 30% in December.
[Picture 3] While amount of most of supply of LCD panels for Samsung Electronics and LG Electronics that are world’s top 2 TV manufacturers have decreased, amount of supply for Chinese TV manufacturers has increased. Although there are differences between panel manufacturers, amount of supplies for major Chinese TV manufacturers such as Hisense, Skyworks, Konka and others had generally increased in December.
Industry believes that as China’s major TV manufacturers had increased their supplies in December, shipments of panels also had increased at the same time. It is estimated that shipment of panels for Chinese TVs had increased by more than 20% in December compared to November.
Samsung Display and LG Display also have increased amount of supplies for Chinese manufacturers. Amount of supplies for Chinese TV manufacturers such as Hisense, Skyworks and others have increased.
Market research company called IHS believes that Samsung Electronics and LG Electronics have decreased proportion of supplies from its affiliates to reduce cost as global TV markets are not really showing any sign of growth.
“Although TV manufacturers tend to buy panels from their affiliates during a business cycle slump, they have unusually decreased amount of supplies from its affiliates and are replacing those supplies with Chinese and Taiwanese panel manufacturers that conform to their product lines.” said Deborah Yang who is the director of IHS Display Supply Network Research Analysis. It is also important that foreign suppliers’ supply capabilities and competitiveness in prices and quality of panels have been steadily improving.
It can be also seen that a reason why they are increasing amount of outsourcing is because they want to preoccupy their positions in China. They can continue their influence in Chinese panel supply markets and reduce cost.
IHS concluded that amount of overall shipment of TV panels of Samsung Electronics and LG Electronics had decreased from 46% in 2014 to 41% in 2015. It is estimating that it will further be decreased to 37% this year.
Staff Reporter Bae, Okjin | withok@etnews.com