Electronics Production | August 18, 2011

Taiwan’s LCD TV OEMs on the rise

Taiwan's LCD TV OEMs shipment by major LCD TV OEMs in Taiwan grew by 7.3% in Q2 relative to Q1 of this year.
Demand for worldwide overall LCD TV was adjusted, decreased to 201-203 million. In Q2, brand shipment declined 2% compared to Q1. Although Taiwan's overall LCD TV shipment was affected, the Q2 shipment of Taiwan's LCD TV OEM had a remarkable growth of 7.3%.

Taiwan's LCD TV OEMs growing annually: 2011 estimate around 23-25% of worldwide demand shipment

Burrell Liu, research associate of WitsView, indicated that starting in 2008, Taiwan's OEM ratio of LCD TV gradually grew from 15.7% to the estimated 23-25% (a volume about 47~49 million) for 2011 worldwide LCD TV. According to the worldwide average data, one out of every four LCD TVs was made by Taiwan's OEMs. The gradual growth of Taiwan's OEM LCD TV in overall worldwide demand also demonstrates that it is a future trend for brands to outsource LCD TV. Due to their quality, services, and competitive and cost advantages, Taiwan’s OEMs will remain an important option for the international brands during this economic downturn.

Hon Hai Group purchased Sony's TV assembly plants in Mexico and Slovakia (capacity around 15-20 million) last year, Compal purchased Toshiba's plant in Mexico (capacity around 3-5 million) in the middle of this year; in addition, Hitachi and other brands also intend to release orders to Taiwan's OEMs.

Taiwan's LCD TV OEMs shipment status in the first half of the year and Q2:

Chimei's TV OEM unit (formerly Innolux) was formally incorporated into the Hon Hai Group in July; the overall market share increased significantly as a result. Burrell Liu compared the overall shipment of Taiwan's TV OEMs in the first half of the year: TPV ranked first with a market share of 31%. TPV finalized its contract details with Philips TV brand, securing the number one OEM position in 2011 worldwide TV.

2011 1st Half Taiwan LCD TV SI Share Ratio for TW SI / 2011 Taiwan LCD TV SI Year BP Share Forecast

© WitsView

After merging Chimei’s TV OEM, Hon Hai quickly rose to the number two position in worldwide OEM (also number two in Taiwan). Despite the weak orders from Sony this year, their momentum after the merger, vertical integration synergies, and the close partnership in brand strategy (Sony/Sharp/Vizio) should not be overlooked; they remain a respectable and formidable competitor among all OEMs.

Also worth noting was Wistron, although also affected by the weak demand from Sony, its market share ranked third in Taiwan at 17%. Despite ranking fourth, Compal should have strong growth potential after finalizing the details of cooperation with Toshiba. Amtran, impacted by the decline of Vizio's North American market share, its overall OEM volume only had a 9% ratio in Taiwan; close observation is necessary to determine whether the peak orders from Vizio will reappear in Q4.

Even with only a 6% ratio, Unihan's long-term growth power should not be overlooked in particular its 100% ODM strengths and the fact that it has opened up access to the European brands. On a quarter on quarter (QoQ) overall basis in Q2, Unihan had the highest growth of 36%, followed by Hon Hai Group's 18% and Wistron’s 17%. In addition, the overall volume of Taiwan’s TV OEMs falls between 47-49 million in 2011.
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