Major Chinese TV Brands Expand Market Share with Strategic Supply Chain Integration and Regional Diversification
January 4, 2024 | TrendForceEstimated reading time: 3 minutes
Global TV demand continues to be adversely impacted by inflation in 2023. Even price reductions and promotions on high-priced products have struggled to boost sales as consumers contend with limited disposable income. This has resulted in a decline in shipments for international brands that primarily focus on mid-to-high-end models, according to TrendForce's research.
TrendForce points out that only Hisense and TCL—leveraging their cost advantages—have managed to defy this trend, achieving over 10% growth in shipments. Their market shares have also increased to 13.8% and 12.9%, respectively.
TrendForce indicates that the current surplus in TV panel production capacity, coupled with sluggish demand, necessitates effective management of supply chain resources from upstream to downstream. This is essential not only for enhancing production efficiency and reducing costs but also for the key expansion of market share for panels, brands, and OEMs at present. Furthermore, this vertical or horizontal integration within the supply chain forms a fundamental component for the sustained growth in shipments for TV brands and OEMs going into 2024.
In 2023, the top five brands achieve a landmark 62.3% market share; “The bigger the better” trend poised to continue into 2024
A significant rise in TV panel prices in 2023 has led to differentiation among brands becoming increasingly stark. The top five brands—Samsung Electronics, Hisense, TCL, LG Electronics, and Xiaomi—are estimated to achieve a combined market share of 62.3% for the first time. Additionally, generic brands have seen an approximate 9.1% annual growth in shipments as they claim a 16.7% market share. This growth is primarily attributed to North American channel brands launching low-cost TVs since 2H22, a strategy that draws consumers in with initial purchases and encourages subsequent purchases.
However, global TV shipments are expected to fall by 2.3% in 2023, heavily impacting brands with shipments below 6 million units, particularly those shipping less than 3 million units, who may face even tougher operational challenges.
TV brands reorganize supply chains: Cost optimization emerges as key to success in 2024
Historically, giants like Samsung and LG Electronics have enjoyed the backing of their group’s panel makers, swiftly increasing their market share and securing a dominant market position. However, the massive expansion of Chinese panel production capacity and the resulting price competitiveness have led Korean panel makers to exit the supply chain under loss pressures, forcing Korean TV brands to pivot towards collaborations with other panel makers, including an increased reliance on Chinese panel makers.
Nevertheless, as Chinese panel makers assume a greater role in the global TV panel supply, their bargaining power with brands is also on the rise. TrendForce's survey for 2024 predicts Samsung Electronics will significantly reduce its dependency on Chinese panel makers, dropping its procurement share from 55% to 38%, while other brands will continue to source over half of their panels from China.
TV panels (open cell) represent about 45–60% of the total production cost of a TV set. In the context of sustained weak market demand, panel makers may adopt strategies of production control and price maintenance to ensure operational stability. Consequently, TV brands, OEMs, and ODMs can only mitigate costs by optimizing electronic components like backlight units, mechanical components, mainboards, and power boards.
Hisense and TCL, boasting in-house factories both domestically and internationally, are continuously increasing their share of domestic component suppliers to control production costs optimally, thus enhancing the sales competitiveness of their brand products. Additionally, TV OEMs, and ODMs like MOKA, BOEVT, and HKC are expanding their business footprint. By forming strategic alliances with group panel makers and moving into overseas markets like Mexico and Vietnam, they are saving on import tariffs to the US and Europe, while simultaneously securing more orders.
Suggested Items
SCHMID Group Closes Business Combination, Begins Trading on NASDAQ
05/02/2024 | SCHMID GroupGebr. SCHMID GmbH, a global solutions provider for the high-tech electronic, photovoltaics, glass, and energy systems industries, and Pegasus Digital Mobility Acquisition Corp. announced the completion of their business combination.
Sanmina's Second Quarter Fiscal 2024 Financial Results
05/02/2024 | Sanmina Corp.Sanmina Corporation, a leading integrated manufacturing solutions company, today reported financial results for the fiscal second quarter ended March 30, 2024 and outlook for its fiscal third quarter ending June 29, 2024.
TTM Technologies Reports First Quarter 2024 Results
05/02/2024 | TTM TechnologiesTTM Technologies, Inc., a leading global manufacturer of technology solutions including mission systems, radio frequency components and RF microwave/microelectronic assemblies, quick-turn and technologically advanced printed circuit boards , reported results for the first quarter 2024, which ended on April 1, 2024.
Intel Takes Next Step Toward Building Scalable Silicon-Based Quantum Processors
05/02/2024 | BUSINESS WIRENature published an Intel research paper, “Probing single electrons across 300-mm spin qubit wafers,” demonstrating state-of-the-art uniformity, fidelity and measurement statistics of spin qubits.
RTX's Pratt & Whitney Canada and Angola's TAAG Airlines sign Fleet Management Program Agreement for PW150A Engines
05/01/2024 | RTXPratt & Whitney Canada and TAAG Angola Airlines E.P., Angola's state-owned airline, have signed a six-year Fleet Management™ Program (FMP) agreement. The engine maintenance services cover the airline's PW150A engines which power their fleet of Dash 8-400 regional turboprops.