© saniphoto dreamstime.com Analysis | June 04, 2019
Impending tariffs cast a shadow on TV market development
As worries spring up in the market about whether the 25% tariff arising from the US-China trade war would impact TV markets, US President Trump has further announced on May 30 that he plans to levy a 5% tariff on Mexico's imports to the US on June 10 due to illegal immigrant issues.
The tax will keep escalating and hit 25% in October. WitsView, a division of TrendForce, suggests that the tariff problems to follow may severely impact US market confidence and drag down global TV shipments for 2019. “Mexico has always formed the bases of assembly for many consumer electronics in the US, including TVs, due to being conveniently well-located and the tariff benefits from the USMCA,” says Eric Chiou, research vice president at TrendForce. 2018, for example , saw Mexico producing around half of all TV products sold in the US-led North American TV market, while the other half came from China. It is exactly due to Mexico's buffering role that worries over the trade war impact on TV markets were not as intense as over its impact on notebook PCs and smartphones, as the latter two are lacking in production dispatching flexibility. Korean and Japanese Brands' Large Mexican Capacity to Become an Underlying Concern If the US Imposes Tariffs on Mexico According to TrendForce's investigations, the seven major TV brands in the North American market are Samsung, Vizio, TCL, LG, Hisense, Funai and Sony, which collectively make up 85% of the total market. The effects felt from the trade war vary depending on production bases and operating models. Vizio is highly reliant on partnering China OEMs in production, and is thus seen as the brand to be hit by the first wave of the US-China tariff war. And although TCL and Hisense, two fast rising companies in North American markets, have capacities in Mexico available for regulation, their heavy dependencies on Chinese manufacturing leave their highly prized cost and price advantages vulnerable to levied tariffs by the US and China. In comparison, Samsung, LG, Sony and other global brands who possess large amounts of TV assembly capacity in Mexico were not only able to return unscathed from this trade war, but even become beneficiaries from the misfortune of competitors suffering elevated costs. However, once Mexico's imports come under tax-siege, Mexican TV capacity will immediately become quite the hot potatoes for global TV brands. North American Market Forms a Fifth of Global Shipments; Diminishing TV Demand to Exacerbate the Panel Oversupply Production dispatching routes for TV brands were virtually severed by the exposure of two countries to the imposed tariffs: first China, then Mexico. Not only is this a US TV market disaster in the making, but it would also hurt the future TV market. The US-led North American market contributes to 20% of global TV shipments, and is also one of the main sales region for extra-large screens 65 inches and above. Raised costs derived from tariff issues may immediately prove detrimental to sales promotions in 2H, perhaps even causing US market sales momentum to come to a screeching halt. Apart from impacting TV shipment scale, there may also be rising concerns over a slowing expansion in TV sizes, which will form an additional woe for the panel industry, which is already stuck in a vicious oversupply cycle. The tariffs imposed by the US on Mexico is scheduled to climb by the month up until October. TrendForce analyzes that TV brands may soften the impact by stocking up ahead of time, injecting a bit of momentum into the panel industry by bringing up TV panel demand momentarily. Yet if towering tariffs become the norm, the affordable TV market that Americans have grown accustomed to may become something of the past, and dwindling demand may haunt the market in the future. If this happens, it will definitely impact brands' panel procurement needs, and panel suppliers in Korea, Taiwan or China will find it difficult to emerge from the ordeal in one piece. Of course, whether the Mexican government may take effective measures to control illegal immigrants and win the trust of the Trump administration is also key to solving the US-Mexico tariff dispute.
For more information visit TrendForce.
For more information visit TrendForce.
Heidenhain opens new expanded Western US HQ This includes the expansion of its executive, sales and technical support offices, as well as demo facilities in San Jose, California.
Delphi Technologies awarded new power electronics business Delphi Technologies is making new strides by securing new power electronics business wins in the second quarter of 2020 with three Chinese OEMs. The new business is scheduled to launch in the 2021-23 timeframe.
Mycronic combines US operations in new facility near Boston Mycronic US says that all of its operations have been integrated into a new 102,000 square-foot facility in Tewksbury, near Boston, Massachusetts.
Lynn Electronics acquires West Coast cable assembly company Pennsylvania-based Lynn Electronics, a manufacturer of fibre optic and copper cable assemblies, has completed its acquisition of Coast 2 Coast, LLC (C2C), an Anaheim, California cable assembly manufacturer.
Fictiv and Jabil team up for agile 3D printing collaboration The collaboration aims to accelerate and de-risks product development in the move from prototyping and low volume production to large scale global fulfilment.
TT expands with new industrial electronics manufacturing facility The UK-based electronics manufacturing specialist is expanding the footprint of its Global Manufacturing Solutions division by opening operations in Kuantan, Malaysia.
GE Appliances invests $62 million at its Louisville facility The manufacturer is gearing up to build high-end refrigerators and expand capacity at its manufacturing facility in Louisville, Kentucky., creating 260 new jobs.
Eaton buys new facility – merges busway operations from multiple sites Power management company Eaton has purchased a new facility in Hodges, South Carolina, establishing a new home for Eaton’s busway product line currently spanning three facilities across Greenwood County.
AIM adds new facility in Brazil AIM Solder has opened a new wholly-owned facility in Manaus, Brazil. This new stocking facility, which represents the only legitimate source of AIM products in Brazil, enables the company to support a growing Brazilian market.
PFOA now in REACh and POP regulation On 4 July, PFOA - perfluorooctanoic acid, its salts and precursor compounds - was included in the POP (Persistent Organic Pollutants) Regulation (EU) 2019/1021 and at the same time also came into force in the REACh Regulation (Annex XVII, entry 68).
Manz AG receives further Battery order Manz AG is expanding its successful partnership with an international battery manufacturers in the Energy Storage segment with a further major order in the mid double-digit million euro range.
Advantech and Interlatin to set up JV in Mexico Industrial IoT specialist, Advantech, says it is establishing a joint venture subsidiary in Mexico with its channel partner Interlatin.
Mercedes-Benz takes equity stake in Farasis Mercedes-Benz is taking another important step on its journey towards CO₂--neutral mobility. The Stuttgart-based car manufacturer has launched a strategic partnership with Chinese battery cell manufacturer Farasis Energy (Ganzhou) Co., Ltd., including taking an equity stake.
A new EMS provider sees the light of day EMS providers DataED and Bestronics merge to launch a new player – Emerald EMS.
Tektronix joins the fight agains COVID-19 Tektronix has shifted its focus from supporting vehicle manufacturing to assisting with ventilator production.
ABB completes divestment of Power Grids to Hitachi ABB has reached a significant milestone in the company’s transformation towards a decentralized global technology company, with the completion of the divestment of 80.1% of its Power Grids business to Hitachi.
Germany amps up domestic battery production with massive state subsidies The German government is investing more than EUR 1.5 billion in battery cell research and production.
Internal promotions and executive retirements at Kimball EMS provider, Kimball Electronics, has made two new internal promotions aimed at contributing to the company accelerating its strategic growth plans.
Kyocera & TMDU team up for research on vitals measurement headset Kyocera Corporation and Tokyo Medical and Dental University (TMDU) have teamed up on a joint research project to develop a wireless headset that can remotely monitor high accuracy patient biometrics, such as blood oxygen saturation (SpO2).
German battery manufacturer receives funding for cell production facility VARTA AG receives public funding of EUR 300 million for battery cell production facility.
Scanfil to streamline its factory network The EMS provider is planning to combine the production of its Hamburg factory with its other factories in Germany and Poland
Kitron awarded new order within measurement technology Kitron has been awarded new business for measurement technology. The award covers a period of five years, and the expected annual value is between EUR 3.5-5 million.
NORBIT ASA awarded aquaculture contract Norwegian technology manufacturer, NORBIT, has been awarded a new contract from an existing customer within the aquaculture market.
Saki strengthens its Asian operations The AOI specialist is expanding its global sales organisation with new Asia sales department, and appointing Katsuhiro Eddie Ichiyama as Senior General Manager for the Asian regionLoad more news