© 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.
dSPACE adds West Coast office
Simulation and validation specialist dSPACE has opened a Silicon Valley office in San Jose, California as part of its strategic realignment.
Cogiscan, BasiCAE form strategic partnership
Quebec-based Cogiscan Inc. has announced a partnership with China’s BasiCAE Technology, a provider of traditional shop control systems and software customization services.
Korea hits new record of industrial robots in operation
The World Robotics report presented by the International Federation of Robotics (IFR) shows a new record stock of about 300,000 operational industrial robots in the Republic of Korea in 2018 (+10%).
Keytronic starts production at its new Vietnam facility
Keytronic Corporation says it has started shipping product from its new Da Nang, Vietnam manufacturing facility.
USI's looking to accelerate expansion - acquires Asteelflash
It looks like we’re ending 2019 with a bang. One of the worlds biggest EMS providers wants to acquire one of Europe’s largest electronics manufacturers.
Devon manufacturer adds capabilities in Dorset via acqusition
Devon-based PCB manufacturer, EuroTech Group, is acquiring PCB manufacturer Lyncolec, based in Poole, Dorset.
Kyocera and TactoTek collaborate on IMSE solution
Kyocera and TactoTek has singed a marketing agreement which aims to bring IMSE solutions to several new market segments, including industrial and automotive components, electronic devices, and more.
IPC: Unanimous approval of USMCA needed
IPC issued a statement this week expressing support of the recently bi-partisan approval of the United States-Mexico-Canada Agreement (USMCA), and a strong desire for legislative approval by Canada, Mexico, and the U.S.
Nordson's CFO to retire in 2020 after 30 years with the company
Nordson's Executive Vice President and Chief Financial Officer, Gregory A. Thaxton, plans to retire in 2020 after thirty successful years with the company, with the last 12 years as CFO.
KUKA restructures subdivision due to economic uncertainty
KUKA is restructuring a subdivision in the Robotics segment that is responsible for automated manufacturing solutions such as cells and special machines.
PCB industry recovers slightly in Q3
PCB manufacturers in the D/A/CH region were able to increase sales sequentially in the third quarter of 2019 by 1.1%. However, sales figures are 11% lower than those recorded for the third quarter of 2018, reports the industry association ZVEI PCB and Electronic Systems.
Garz & Fricke moves into new HQ in Hamburg-Harburg
Garz & Fricke GmbH continues to expand. As of late October, the business operations of the HMI and Panel PC specialist will be transferring to the new headquarters in in Hamburg-Harburg.
TF Massif Technologies taps new CEO
British Columbia-based TF Massif Technologies has announced the appointment of Tom Peregoodoff as the company’s new chief executive officer.
DoJ: Google, Fitbit deal under review
The U.S. Justice Department is looking into anti-trust issues concerning Google's bid to buy Fitbit Inc.
L3Harris Tech secures U.S. Marine Corps order
L3Harris Technologies received a USD 50 million follow-on delivery order for Falcon III AN/PRC-160 HF radios and related equipment from the U.S. Marine Corps .
Metair completes Romanian lithium-Ion battery cell factory
South African energy storage company, Metair Investments, says that its Romanian units Prime Batteries and Rombat have completed the installation of the group's first Lithium-Ion battery cell manufacturing and assembly facility in Bucharest, Romania.
£5m award marks ‘topping out’ of Cardiff research powerhouse
An GBP 80 million Cardiff University powerhouse for Welsh scientific research has been ‘topped out’ by Bouygues UK – backed by over GBP5 million support from Welsh Government and industrial partners.
Advanced Energy expands with new lab near Frankfurt
Advanced Energy Industries, Inc. has opened its Advanced Materials Processing (AMP) Showcase Lab near Frankfurt, Germany.
TTM Technologies unveils NY engineering center
On the heels of its acquisition of manufacturing and IP assets from i3 Electronics Inc., TTM Technologies has announced the opening of a new engineering center in Binghamton, NY.
EU Commission to support pan-European battery development
Seven member states will provide, in the coming years, up to EUR 3.2 billion in funding to support research and innovation in the common European priority area of batteries.
The pulse of the electronics industry
Growth is slowing worldwide and the industry’s outlook is less optimistic than in previous quarters, although it is still generally positive, according to the results of IPC’s fourth-quarter 2019 Pulse of the Electronics Industry survey.
Teradyne delivers J750 semiconductor test system to Ardentec
Teradyne has hit a milestone with the 6,000th shipment of the J750 family of semiconductor testers.
Season Group names new SvP for global business development
Season Group has appointed Stephen Tsao as the company's new Senior Vice President, Global Business Development.
Zestron appoints new sales director Europe
Mr. Adam Meinert recently joined ZESTRON as the Sales Director of Europe.
Load more news