Display Orders From TV Makers Set to Rise to 45.8 Million Units: Omdia

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  • To counter the South Korean onslaught, Chinese TV makers are taking measures to fortify their positions in overseas markets
  • There was unexpectedly large growth in television sales during March and April 2020

Following a dismal second quarter marred by the impact of COVID-19, television display panel makers now are anticipating a robust third-quarter rebound as TV makers prepare to boost their orders by a forecasted 20 per cent. According to a recent Omdia report, display orders from television makers are set to rise to 45.8 million units in the third quarter, up from 38.3 million in the second quarter.

“Chinese and South Korean television makers plan to significantly boost panel purchasing activity in the third quarter as they respond to falling display prices and competitive pressures in the market,” said Deborah Yang, director of display supply chain at Omdia.

Chinese vs Korean

Korean TV makers in the third quarter will increase their orders by 30 per cent quarter-over-quarter (QoQ), while Chinese TV makers are planning to increase their purchasing volumes by 10 per cent QoQ.

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“Television makers believe that prices for some TV panels reached a cyclical low point in April and May, compelling them to consider resuming their purchasing activity. Moreover, Chinese TV makers are moving to secure panel supplies in order to head off plans by South Korean rivals to increase their market share,” added Yang.

Amid fears of a global recession and following several television factory closures in March and April, TV makers were forced to curb their ambitions of boosting their display panel purchasing volumes in the second quarter. As a result, TV panel purchases in March were about 15 to 20 per cent lower than Omdia’s previous forecast.

However, starting in the latter part of April, the leading Korean TV makers changed their purchasing strategies and resumed panel buying. These companies and their Chinese competitors are signaling very aggressive purchasing plans for the third quarter.

“If these aggressive purchasing plans actually materialize, this would represent a record-high quarter, with orders increasing by 20 per cent compared to the same period one year ago,” Yang said.

Unexpected large growth in television sales

TV makers have been facing increasing challenges as they strive to sell their wares during a time when global demand is being hit hard by the COVID-19 pandemic. However, there was unexpectedly large growth in television sales in the United States in March and April. Despite this, retailers are unable to forecast demand for the rest of the year, although they are assuming that consumer spending will decline due to layoffs.

Regardless of the pandemic, the leading Korean TV brands are tenaciously pursuing their ambitions to widen the market-share gap with their rivals.

“Korean TV brands want to lock-in panel supplies in order to support their aggressive shipment plans for the year. This is compelling Chinese TV makers to follow suit—despite the fact that these companies are already holding excess panel inventories,” Yang said.

To counter the South Korean onslaught, Chinese TV makers are taking measures to fortify their positions in overseas markets. TV supply chain participants are increasingly concerned that the growing tensions over China’s handling of the COVID-19 pandemic could worsen and expand the trade war. Trade war disputes threaten to spread beyond China and the United States and could start to involve other countries.

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