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TV Shipments To Decline, Says TrendForce

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TV shipments expected to drop 12.4 percent YoY in 2H21 despite arrival of traditional peak season

Quarterly TV shipment for 3Q21 reached 52.51 million units, representing an 8.3 percent QoQ increase but a 14.7 percent YoY decrease, according to TrendForce's latest investigations.

Demand for TVs was constrained during the quarter by the increase in various country's vaccination rates as well as the rising retail prices of TV sets, resulting in a YoY shipment decline despite the arrival of the peak season. It should be noted that prices of TV panels began to plummet in August, and this price drop enabled Chinese TV brands to both expand sales during the Singles' Day (November 11) shopping festival and in turn make up for deficits in their yearly sales targets.

Global brands, on the other hand, will be unable to capitalise on the price drop of TV panels by reflecting this cost-savings on their TV sets' retail prices until 1Q22 due to factors such as production, transportation, and inventory adjustments. These brands are therefore having a difficult time increasing their TV shipment for 4Q21. Quarterly TV shipment for 4Q21 is expected to reach 59.13 million units, representing a 12.6 percent QoQ increase but an 10.3 percent YoY decrease. TV shipment for 2H21 will therefore likely be among the lowest compared to shipment volumes for second halves of previous years historically.

TrendForce further indicates that TV manufacturers' shipment performances have been weakening this year as the market approaches the year's end. Stimulus checks issued in the US resulted in persistently high TV shipment in North America in 1H21, with brands maintaining their procurement of TV panels, thereby driving up the prices of TV panels as a result.

As the COVID-19 pandemic is gradually brought under control, and everyday life returns to normalcy in Europe and North America in 2H21, the pandemic-generated upswing in TV sales subsequently lost momentum. Furthermore, while prices of raw materials and transportation/logistics services remained sky-high, manufacturing costs of whole TV sets also underwent a sharp climb and were then transferred to consumers. Taken together, these factors quickly wiped out market demand for TVs. TrendForce therefore expects annual TV shipment for 2021 to reach 210 million units, a 3.2 percent YoY decline.

Brands are favouring OLED TVs

TV brands face various manufacturing-related challenges this year. Not only have panel costs, which account for the largest share of TV sets' manufacturing costs, undergone an increase, but port congestions have also led to rising shipping costs and an extended lead time before TV sets can be delivered for retail sale. In addition to an uneven availability of various components, these aforementioned obstacles all exacerbate the risks involved with TV brands' shipment. In a bid to maximise profits, however, brands have been making a concentrated effort to ensure that the production of OLED TVs remained free from disruptions in an effort to maximise profits.

As brands shift the focus of their sales efforts to OLED TVs, OLED TV shipment for 2021 is expected to reach 6.8 million units, a 72.8 percent YoY increase. This growth can primarily be attributed to an increase in OLED TV supply due to the expanded production capacity of LGD's production line in Guangzhou, as well as the narrowing difference between LCD panel prices and OLED panel prices due to the sharp rise in the former in 1H21. In particular, LGE is set to take leadership position with an over 60 percent market share and a 91 percent YoY growth in its OLED TV shipment. Trailing behind in second place is Sony, which has been sourcing OLED panels from LGD. The Japanese company is expected to register a 53 percent YoY increase in shipment and possess a 20 percent market share. Panasonic, on the other hand, comfortably took third place with a 7 percent market share. Notably, Xiaomi and Sharp are the two dark horses with regards to OLED TV shipment this year with explosive YoY growths of 900 percent and 140 percent, respectively.

Big brands to focus on high-end and large-sized segment

While demand in the TV market recovers as the pandemic runs its course, TrendForce expects 45 percent and 55 percent of the total annual TV shipment for 2022 to take place in 1H22 and 2H22, respectively. TV shipment for 2022 will likely reach 217 million units, a 3.3 percent YoY increase, as brands are able to aggressively ramp up their TV shipments thanks to not only an undisrupted supply of panels, but also gradually stabilising prices. For major brands, their focus will be on medium-sized and large-sized products and on products with substantial added values.

Hence, the market share of large-sized TVs (including 65-inch and above models) will for the first time ever surpass 20 percent, with medium-sized (40-inch to 59-inch models) TVs remaining at a 55 percent market share. Although major brands are gradually exiting the small-sized segment, and smaller brands will have an easier time expanding their presence in emerging markets owing to gradually stabilising prices, small-sized (39-inch and below models) TVs will see their market share drop by 1.8 percent next year to 25 percent. In any case, the primary target markets for major brands and smaller brands will not overlap next year.

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