Earthquake Temporarily Halts Silicon Wafer, MLCC, and Semiconductor Facilitie sin Japan, Impact <span style='color:red'>Expected</span> to be Controllable, Says TrendForce
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Earthquake Temporarily Halts Silicon Wafer, MLCC, and Semiconductor Facilitie sin Japan, Impact Expected to be Controllable, Says TrendForce

　　TrendForce’s investigation into the impact of the recent strong earthquake in the Noto region of Ishikawa Prefecture, Japan, reveals that several key semiconductor-related facilities are located within the affected area. This includes MLCC manufacturer TAIYO YUDEN, silicon wafer (raw wafer) producers Shin-Etsu and GlobalWafers, and fabs such as Toshiba and TPSCo (a joint venture between Tower and Nuvoton).　　Given the current downturn in the semiconductor industry and the off-peak season, along with existing component inventories and the fact that most factories are located in areas with seismic intensities of level 4 to 5—within the structural tolerance of these plants—preliminary inspections indicate no significant damage to the machinery, suggesting the impact is manageable.　　In terms of silicon wafer production, Shin-Etsu and GlobalWafers' facilities in Niigata are currently shut down for inspection. The crystal growth process in raw wafer manufacturing is particularly sensitive to seismic activity. However, most of Shin-Etsu's crystal growth operations are primarily in the Fukushima area, thus experiencing limited impact from this earthquake. SUMCO reported no effects.　　On the semiconductor front, Toshiba's Kaga facility in the southwestern part of Ishikawa Prefecture is currently undergoing inspections. This site includes a six-inch and an eight-inch factory, along with a twelve-inch facility slated for completion in the 1H24. Additionally, the three TPSCo factories in Uozu, Tonami, and Arai—co-owned by Tower and Nuvoton (formerly Panasonic)—are all undergoing shutdowns for inspections. In contrast, USJC (UMC's acquisition of the Mie Fujitsu plant area in 2019) was not affected.　　MLCC manufacturer TAIYO YUDEN’s new Niigata plant, designed to withstand seismic activity up to level 7, reported no equipment damage. Murata (MLCC fabs only) and TDK’s MLCC plants experienced seismic intensities below level 4 and were not notably affected. However, Murata’s other factories (Non-Production MLCC) in Komatsu, Kanazawa, and Toyoma, which are in the areas with seismic intensity above 5, were closed for the New Year holiday, and staff are currently assessing any damage.
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Release time：2024-01-03 16:49 reading：1838 Continue reading>>
China's SiC capacity is expected to account for 50% of the world's share in 2024
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China's SiC capacity is expected to account for 50% of the world's share in 2024

　　As reported by Taiwanese media, there’s a gradual uptick in TSMC’s capacity utilization lately, accompanied by a noticeable surge in orders from TSMC’s clients. Some segments of the market are showing signs of rekindled demand, hinting at a possible upswing in the semiconductor industry. Nevertheless, certain semiconductor manufacturing firms remain cautious in their industry outlook.　　TSMC’s Capacity Utilization Rate on the Rise　　Media’s report indicates that TSMC’s capacity utilization rate has gradually recovered. The 7/6nm utilization, which had dropped to 40% at one point, is now around 60% and could potentially reach 70% by the end of the year. Similarly, the 5/4nm utilization is at 75-80%, and the 3nm capacity, which increases seasonally, is approximately 80%.　　Concurrently, TSMC is experiencing a significant uptick in orders from their clients, including tech giants like Apple, MediaTek, NVIDIA, AMD, Intel, Broadcom, Marvell, and STMicroelectronics. Furthermore, AI chip clients such as AMD’s subsidiary Xilinx, Amazon, Cisco, Google, Microsoft, and Tesla have all accepted TSMC’s plan for a price increase in 2024.　　Taking Tesla as an example, they are building a supercomputer facility in Austin to accelerate the development of their autonomous driving system, expanding the computing power of Dojo. The core D1 of Dojo is produced using TSMC’s 7nm process and advanced packaging technology. Based on this, Tesla is deepening its collaboration with TSMC, and it’s expected that their order volume will increase from around 5,000 pieces this year to 10,000 pieces next year.　　Amid the ongoing AI surge, NVIDIA is actively seeking additional production capacity. On October 19th, NVIDIA’s CEO, Jensen Huang, revealed in an interview that the global demand for AI chips remains robust. He has met with TSMC’s CEO, C.C. Wei, to discuss providing more capacity to serve customers. NVIDIA is in the planning stages for the next generation of chips designed for AI-based infrastructure and has also engaged in discussions with partners such as Quanta and ASUS to strategize collaboration.　　Is the Semiconductor Industry on the Rebound?　　During TSMC’s Q3 earnings call, C.C. Wei pointed out that, in addition to strong AI demand, there’s a rebound in demand for smartphones and personal computers. As for automotive electronics, benefiting from the continued growth of electric vehicles, the demand for next year is expected to be quite robust. Regarding when the semiconductor industry might hit bottom, Wei remarked that there are some early signs appearing in the PC and mobile phone sectors. However, it remains challenging to predict a strong resurgence as customers are still cautiously managing their inventories.　　In response to industry concerns about smartphone growth, TSMC’s CFO, Wendell Huang, noted that smartphone growth is anticipated to remain lower than the company’s future growth rate. High-Performance Computing (HPC) is expected to be the most robust growth segment, making substantial contributions to growth in the coming years.　　On the other hand, other semiconductor foundry companies, such as PSMC, have also shared their perspectives on the fourth quarter and future industry developments. Recently, PSMC’s President, Brian Shieh, pointed out that the supply chain’s inventory seems to have reached a reasonable level, with growing demand for mobile panel driver ICs, surveillance system CIS chips, and visibility extending beyond one quarter. Prices for special memory products have started to show an upward trend. Demand for Power Management ICs (PMIC) also displays signs of recovery, even though the trend isn’t as pronounced as that of driver ICs and CIS chips.　　Regarding UMC, the company is scheduled to hold an earning call on 25th October. In their previous earnings call for the last quarter, UMC mentioned that due to ongoing adjustments in the supply chain’s inventory, the outlook for wafer demand remains uncertain. Although the industry glimpsed a modest recovery in the second quarter, the overall sentiment in the end-market remains subdued, and customers continue to maintain stringent inventory management practices.
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Release time：2023-10-25 11:35 reading：1647 Continue reading>>
TSMC <span style='color:red'>Expected</span> to Lower Capital Expenditure, Potentially Falling Below $30 Billion for the Year
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TSMC Expected to Lower Capital Expenditure, Potentially Falling Below $30 Billion for the Year

　　As TSMC’s earnings call approaches, the market is abuzz with rumors that the company may revise down its capital expenditure target for this year. This potential adjustment is believed to be driven by delays in Intel’s 3-nanometer outsourcing and the deferral of the production schedule for TSMC’s 4-nanometer US fab. The initial capital expenditure target, which was close to the $32 billion to $36 billion range, may now be lowered to below $30 billion, marking its lowest point in nearly three years.　　According to Taiwan’s Economic Daily, TSMC has refrained from commenting on these speculations. Even if TSMC does adjust its capital expenditure for this year, industry sources suggest that the company will increase its annual R&D expenses, continuing its commitment to advanced research and development.　　In recent years, TSMC has rapidly expanded its capital expenditure, reaching a record high of $36.3 billion last year. In the first half of this year, the actual capital expenditure amounted to $18.11 billion, including $8.17 billion in the second quarter, slightly down from the $9.94 billion in the first quarter.　　During their July earnings conference, TSMC stated that their capital expenditure for the year would remain in the range of $32 billion to $36 billion. However, considering market dynamics, the actual expenditure for the full year is expected to be towards the lower end of this range.　　The latest reports suggest that due to the delays in Intel’s 3-nanometer outsourcing and the postponement of the 4-nanometer production schedule at the US fab, approximately $4 billion originally earmarked for this year’s capital expenditure may be postponed until next year, resulting in capital expenditure for this year falling below $30 billion. As for next year’s capital expenditure, it may remain on par with this year.　　ASML, a leading supplier of semiconductor lithography equipment, previously revealed in its July earnings conference that there were delays in shipments of EUV equipment due to installation delays at customer factories. However, ASML maintained a robust order backlog and expects overall performance to continue growing in 2024.　　Industry experts believe that the “installation delays” mentioned by ASML at that time were related to TSMC, and because of the delay in EUV equipment installation, TSMC’s capital expenditure for this year may be deferred accordingly.　　Analysts in the industry suggest that if we consider TSMC’s earlier projection of capital expenditure falling within the $32 billion to $36 billion range, and subtract the actual expenses incurred in the first half of the year, the capital expenditure for the second half of the year could see a decline, estimated to be around $13.89 billion or more. If the postponement rumors materialize, second-half capital expenditure might fall below $10 billion.
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Release time：2023-10-17 11:03 reading：1832 Continue reading>>
A Sharper Price Decline of Nearly 20% Is <span style='color:red'>Expected</span> for 1Q19 in DRAM Market
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A Sharper Price Decline of Nearly 20% Is Expected for 1Q19 in DRAM Market

　　The overall price trend in the DRAM market has been stable in December, showing no noticeable change from November, reports DRAMeXchange, a division of TrendForce. Clients in North America and Europe were taking a break during the year-end holiday season, so the quantities of DRAM products traded in December were too small to be considered in the survey of contract prices. With regard to contract prices of mainstream products, the monthly average of 8GB modules is staying roughly at US$60, while that of 4GB modules is around US$30. However, for both 8GB and 4GB ones, their monthly lows have already dropped below their respective US$60 and US$30 thresholds.　　DRAM suppliers and OEMs have already begun to discuss prices for the first-quarter contracts since last December. Taking account of the high inventory, the weak demand, and the pessimistic economic outlook for the medium to long term, both sides have reached a general consensus that prices of 8GB modules for the first-quarter contracts will be around US$55 or even lower. This implies that the average contract price of 8GB modules will drop by at least 10% MoM in January, and there is a strong possibility that prices will continue to fall in February and March. For the DRAM price trend in 1Q19, DRAMeXchange expects a quarterly decline of nearly 20%, steeper than the previous forecast of 15%, with the most noticeable decline in the segment of server DRAM.　　At present, the biggest problem in the DRAM market is not the growth of the industry’s bit output, but the earlier arrival of the traditional slow season in 4Q18, which has resulted in increasing inventory level earlier than expected. Among the major DRAM suppliers, Micron witnessed the biggest drop in prices in 4Q18, which lowered its inventory level timely. In comparison, South Korean-based suppliers experienced the lowest price fall and thus lower shipments, which may lead to considerable inventory level throughout 1Q19. For the short term, the supply bit growth will remain constantly higher than sales bit growth, so the inventory level will keep rising, and the prices will keep falling. This price downtrend may even last for more than four quarters from 4Q18.　　With oligopoly in DRAM market, module makers will face lower profitability　　Contract prices of DRAM products have turned downward since 2H18, but further price competition in the highly concentrated DRAM market would only harm the suppliers’ high profitability. Therefore, DRAM suppliers have scaled back their CAPEXs for 2019 so as to stabilize the prices and moderate the oversupply.　　It should be noted that the distribution of the profit across the DRAM supply chain has been heavily skewed toward the memory suppliers in 2018. On the whole, the trend of rising prices that lasted for more than two years before 4Q18 has not produced significant gains for clients in the downstream. For memory module makers, most did very well in 2017 because the short-term price surge during the early phase of the price uptrend allowed them to translate their low-price inventories into profits. However, module makers were unable to extract profits from the price differences of memory chips at the start of 2018 because DRAM prices by then had become excessively high. Their profitability became dependent on just the additional processing work. As DRAM prices have now swung downward in 2H18, module makers carrying high inventories have been exposed to losses in each successive month. With revenues dropping, many of them are projecting that their actual profits for this year will shrink to around one tenth of last year’s (some are also expecting an annual loss). Going forward, 2019 will be even more challenging for module makers and the rest of the supply chain.
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Release time：2019-01-16 00:00 reading：1373 Continue reading>>
Samsung guidance shocks: fourth-quarter profit 18 percent less than market expected
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Samsung guidance shocks: fourth-quarter profit 18 percent less than market expected

Jung Yeon-je | AFP | Getty ImagesSamsung Electronics said on Tuesday that its fourth-quarter earnings likely decreased sharply due to lackluster demand in its memory chip business as well growing competition in the smartphone segment.The South Korean tech giant predicted operating profit for the three months ended December was approximately 10.8 trillion Korean won ($9.67 billion) — a 38.5 percent drop from the previous quarter and below the 13.2 trillion won that analysts predicted.Consolidated sales for the fourth-quarter is predicted to be around 59 trillion won, lower than the 62.8 trillion won analysts predicted in a Reuters poll, and nearly 10 percent down from the third quarter.The chipmaker said weaker-than-expected demand in the memory business led to a decline in shipments and a notable drop in memory chip prices.For its smartphone business, marketing expenses in an essentially stagnant smartphone market led to decline in profitability. Over the third quarter of 2018, Samsung saw more than 13 percent year-over-year decline in global smartphone shipments, according to International Data Corporation.Samsung will disclose detailed earnings later in the month but added that difficult business conditions for the memory business would likely keep its earnings subdued for the first quarter of 2019.The weak guidance from Samsung comes after Apple lowered its revenue and gross margin predictions last week, citing a weakening Chinese economy and lower-than-expected iPhone revenue in Greater China as some of the factors.Concerns over a slowdown in the Chinese economy have kept investors on edge. It could pose a worry for Samsung since it sells memory chips used in smartphones and data centers to Chinese firms. At the same time, it also has production plants in the world's second-largest economy for some of the memory chips — those are likely to be hurt by the ongoing trade tensions between Beijing and Washington.In December, a report from the Korea International Trade Association said the trade war may pose higher risks to both Samsung and its chipmaking rival SK Hynix.At the same time, a slowdown in Chinese consumer demand could potentially affect Samsung's consumer electronics business, including smartphones. One analyst said that China accounts for between 20 to 30 percent of global consumer tech demand.
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Release time：2019-01-08 00:00 reading：3983 Continue reading>>
Smartphone Shipments <span style='color:red'>Expected</span> to Rebound in 2019
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Smartphone Shipments Expected to Rebound in 2019

　　Shipments of smartphones, the mainstay of the electronics industry, are expected to rebound, returning to low-single-digit growth in 2019, according to market research firm International Data Corp. (IDC).　　Shipments are expected to grow 2.6% in 2019 after falling by 3% to 1.42 billion units in 2018 from 1.47 billion in 2017, said IDC. Longer term, smartphone shipments are forecast to reach 1.57 billion units in 2022.　　Forget, for the time being, the U.S.-China trade war. Emerging markets, 5G, and new product form factors will help revive the smartphone market, according to the market research firm. India is one of the key markets boosting shipments.　　“India is definitely on the radar — as of the third quarter in 2018, it has overtaken the U.S. as the world’s second-largest smartphone market,” IDC Associate Research Director Melissa Chau told EE Times. “In 2018, while we still expect China shipments to be roughly three times the volume of India, by 2022, that ratio will shrink to 2:1.”　　India is one of the few markets that has not hit maturity and still has a way to go even in 4G adoption, which will help fuel growth, according to IDC.　　China, which represented 30% of total shipments in 2017, is showing signs of recovery. While the world’s largest market is still forecast to decline by 8.8% in 2018, IDC anticipates a flat 2019, followed by growth through 2022.　　“We don’t expect China to be leading the smartphone growth rebound, especially in light of all the trade war impacts being felt,” said Chau.　　China’s slowdown will persist into the first quarter of 2019, according to IDC. The recently lifted U.S. ban on ZTE had an impact on shipments in the third quarter of 2018 and created a sizable gap that is yet to be filled heading into 2019.　　Growth expectations are based on emerging markets, but if the U.S.-China trade war escalates, there would be a greater negative impact on the industry, probably ratcheting the outlook down to a flat or declining scenario, according to Chau.　　That said, the companies currently benefiting from smartphone growth are the midrange Chinese players like Huawei and OPPO that are targeting maturing markets, she added.　　The U.S. is forecast to rebound in 2019 with 2.1% annual growth after shrinking in 2018.　　The smartphone market is set to pick up as major suppliers such as Samsung and Apple shift toward larger screens and more powerful devices.　　“With many of the large global companies focusing on high-end product launches, hoping to draw in consumers looking to upgrade based on specifications and premium devices, we can expect head-to-head competition within this segment during the holiday quarter and into 2019 to be exceptionally high,” said IDC Senior Research Analyst Sangeetika Srivastava.　　In the third quarter of 2018, the 6-inch to less-than-7-inch screen size range stood out with more than four times year-over-year growth. Larger-screen phones (5.5 inches and above) will lead growth with volumes of 947.1 million in 2018, accounting for 66.7% of all smartphones, up from 623.3 million units and a 42.5% share in 2017, according to IDC. By 2022, shipments of these larger-screen smartphones will move up to 1.38 billion units or 87.7% of overall shipment volume.　　The normal size of a smartphone has shifted dramatically, and while phone makers stretch the limits with bezel-less devices, the next big switch will be flexible screens, said IDC.　　Segment breakdown　　Android’s smartphone share will remain stable at 85% throughout the forecast period. Volumes are expected to grow at a five-year compound annual growth rate (CAGR) of 1.7%, with shipments approaching 1.36 billion in 2022. Android average selling prices (ASPs) are expected to grow by 9.6% in 2018 to $258, up from $235 in 2017.　　IDC expects price increases to continue through the forecast but at a softened rate from 2019 and beyond. Not only are market players pushing upgraded specs and materials to offset decreasing replacement rates, but they are also meeting consumer needs for better performance.　　iOS smartphones are forecast to drop by 2.5% in 2018 to 210.4 million units. The launch of expensive and bigger-screen iOS smartphones in the third quarter of 2018 helped Apple to raise its ASP yet impeded any increase of shipments amid the market slump.　　IDC is forecasting iPhone shipments to grow at a five-year CAGR of 0.1%, reaching volumes of 217.3 million in 2022. Apple will continue to lead the global premium market segment, according to the IDC forecast.
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Release time：2018-12-14 00:00 reading：1299 Continue reading>>
Fab Tool Sales <span style='color:red'>Expected</span> to Decline in 2019
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Fab Tool Sales Expected to Decline in 2019

 After what is expected to be a second-straight record sales year in 2018, the semiconductor equipment market is projected to decline by 4% next year before recovering to grow by more than 20% in 2020, according to the SEMI trade group.In its year-end forecast, released on Wednesday (Dec. 12) at the Semicon Japan trade show, SEMI estimated that fab tool sales will grow 9.7% this year to reach a record $62.1 billion. The forecast is consistent with other forecasts released earlier this year, despite slowing sales growth in recent months.But the forecast calls for tool sales to decline to $56.6 billion next year before rebounding to grow 20.7% in 2020, reaching a new record high of $71.9 billion.SEMI projects that the market for wafer processing equipment — the largest category of semiconductor production equipment — will grow 10.2% this year to reach $50.2 billion. The chip test equipment market is expected to grow by 15.6% this year to reach $5.4 billion, while the assembly and packaging equipment market is forecast to grow 1.9% to reach $4 billion, said SEMI.Semiconductor equipment market in billions of U.S. dollars. (Source: SEMI)South Korea — paced by continued record spending by Samsung Electronics — is expected to remain the largest regional market for fab tools for a second-straight year in 2018. China is expected to leapfrog Taiwan in 2018 to become the second-largest market for chip equipment, growing at a rate of 55.7%, said SEMI.For 2019, SEMI projects that South Korea, China, and Taiwan will remain the top three markets for chip equipment.
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Release time：2018-12-13 00:00 reading：1566 Continue reading>>
Products with Mini LED Backlighting <span style='color:red'>Expected</span> a High Production in 2019
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Products with Mini LED Backlighting Expected a High Production in 2019

According to the latest report - New Display Technology Cost Analysis - by WitsView, a division of TrendForce, Mini LED technology has made constant process over the past year, with a significant increase in production output (in unit per hour, UPH) and die bond accuracy. Looking ahead to 2019, WitsView expects a high possibility of the mass production of products with Mini LED backlighting. The processing costs of display units may increase by 20%~100% depending on the number of Mini LED used.According to Julian Lee, the Assistant Research Manager of WitsView, the number of Mini LED used in a display unit is decided by the thickness of the display and the luminance of the backlight unit. On one hand, the optical distance in the backlight unit is bound to be reduced to meet the market demand for thinner consumer electronic devices. On the other hand, the number of Mini LED needed for a single product remains high in order to maintain the high standard of optical performance.With decreasing the number of Mini LED used to be a possible way of cost reduction while keeping the products thinner, the manufactures may turn to increase beam angle as a solution. Current beam angle of Mini LED is around 120 to 140 degrees, and the epitaxy manufactures have been working on increasing the angle to 140~160 degrees.WitsView notes that Mini LED backlighting is still based on the traditional structure of LCD panels, aiming to enhance the luminance and HDR by increasing the number of LED used, while making the performance comparable to that of OLED displays. Taking a 65-inch UHD 4K TV panel as an example, the production cost of panel modules using high-end direct type LED backlight and quantum-dot enhancement film (QDEF) is probably US$600.As for the same size UHD with Mini LED backlight, which uses 16,000 LEDs, the production cost is around US$700. In case of 40,000 LEDs for better performance, the cost will rise to US$1200, 20% higher than an OLED TV of the same size and resolution. Therefore, it will be a key to the wide adoption of Mini LED in the market that how to overcome the technological hurdles while keeping the technology cost effective at the same time.
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Release time：2018-10-31 00:00 reading：1174 Continue reading>>
Consolidation and Capacity Cut in Solar Industry <span style='color:red'>Expected</span> Due to Gradual Phase-Out of Subsidies Worldwide
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Consolidation and Capacity Cut in Solar Industry Expected Due to Gradual Phase-Out of Subsidies Worldwide

EnergyTrend, a division of TrendForce, reports that some countries are planning or have started phasing out their solar subsidy programs as the global solar photovoltaic (PV) industry and market show stability in their development. During 2013-2017, the average annual growth rate of total PV demand was above 20%. However, this strong growth scenario will unlikely to happen in the future. As the market enters a stagnant phase, manufacturers across the PV supply chain have to be more cautious when planning capacity expansion so that they do not risk incurring losses.In the latest Gold Member Solar Report by EnergyTrend (3Q18), the grid-connected PV generation capacity worldwide is estimated to increase by around 95GW in 2018. However, the actual PV demand for the entire 2018 is estimated to reach just 86GW. During 2017, numerous developers of PV power plants in China had to move their installation target dates forward. At the same time, the US solar companies also stocked up in advance due to their government’s investigation on PV imports under Section 201 of the 1974 Trade Act. Consequently, a part of demand originally reserved for 2018 had been spent in 2017.The global production capacity for PV cells is estimated to increase to nearly 150GW in 2018. The global production capacity for PV modules is also estimated to increase to about the same amount in 2018. On the whole, the oversupply problem has become more acute. Additionally, there have been geographical shifts in the global supply and demand. India officially imposed its 25% safeguard duty on PV cells in 3Q18, just as the EU lifted the minimum import price and the anti-dumping and countervailing duty on Chinese PV imports. As a result, China-made PV modules are again flowing into regional markets that they were previously barred from.Lions Shih, research manager of EnergyTrend, expects consolidation to occur among product manufacturers and among power plant developers. Smaller solar companies will face serious challenges as they are being squeezed out of the market by larger and growing competitors. In the case of Taiwan’s solar industry, three domestic solar enterprises – Gintech, Neo Solar Power, and Solartech – have merged in order to increase in scale and create vertical integration. Several PV manufacturers in Taiwan have also downsized their workforces and cut their production capacity. These are the necessary steps that have to be taken because of the market situation. Manufacturers in China, too, are expected to adopt similar measures, including merger deals, capacity reduction, and even factory closure.Shih points out that demand drives growth and advances of the solar industry as a whole since it influences the mood of the market and price trends. Demand growth, however, continues to be mainly driven by government policies. Going forward, manufacturers across the supply chain will assess trajectories of prices based on various country-specific (or region-specific) indicators. The rates of a country’s feed-in tariff scheme and electricity prices set under tenders for PV power plants, for example, are important policy-related indicators. Another significant indicator is the grid parity targets that are being seriously discussed within the industry during the recent period.Quarterly observations of module prices in China during 2018 find that prices of conventional mono-Si products and conventional multi-Si products dropped by 19.8% and 25.5% on average, respectively, from 1Q18 to 3Q18. If solar PV generation is to come very close to grid parity in China at the start of 3Q19, then prices of conventional mono-Si and conventional multi-Si modules will have to drop by another 2.8% and 9.8%, respectively, during the nine-month period from the start of 4Q18 to the end of 2Q19. To the meet expectation that the price PV electricity has to reach the grid parity level, manufacturers in different sections of the supply chain will be under pressure to keep pushing down their costs.
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Release time：2018-10-10 00:00 reading：339 Continue reading>>
TV Shipments in 2Q18 Were Lower Than <span style='color:red'>Expected</span> Due to High Inventory Level of Channel Distributors; Surging Panel Prices May Bring Risks in 2H18
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TV Shipments in 2Q18 Were Lower Than Expected Due to High Inventory Level of Channel Distributors; Surging Panel Prices May Bring Risks in 2H18

Global shipments of LCD TV sets totaled 47.75 million units for the second quarter of 2018, according to WitsView, a division of TrendForce. This shipment figure represents a quarterly decrease of 3.8%, as a result of the high inventory level of channel distributors. For the rest of this year, the surging panel prices will bring more uncertainties in 2H18. Considering the lower-than-expected shipments in 2Q18, WitsView expects the shipments for the whole year to increase by 2.3% YoY to 215.7 million units, lower than the previous forecast of 219 million.“The TV market had remarkable shipments in the first quarter thanks to the stock-up demand for the World Cup”, says Jeff Yang, the research manager of WitsView. “However, the high inventory level of channel distributors has affected the market since the second quarter.” As the result, TV brands have adjusted their shipping schedules and panel purchases. Despite the upcoming peak season in the third quarter, it would be difficult for TV brands to offer promotions if the panel prices surge too high. The demand would also be restrained by the high panel prices.Falling panel prices in 1H18 may help QLED TVs gain more cost advantagesSamsung, the leading TV maker, attempts to capture more of the high-end market segment with its QLED TVs, but the sales turned out to be lower than expected last year in the fierce competition with OLED TVs. Samsung has been actively shipping its excess channel inventory of older products in 1H18. In addition, QLED TVs, which are based on the structure of LCD panel and QD film, managed to gain more cost advantages thanks to the low panel prices. However, as QLED TVs target at the high-end market segment, the annual TV shipments of Samsung would continue to decrease to 41 million units.While Samsung heavily invests in QLED TV business, LG Electronics (LGE) and Sony have adopted less aggressive strategies, taking respective second and fifth place in the 2Q18 shipment ranking. They have achieved better-than-expected profitability and maintained a healthy level of inventory thanks to continued promotion of OLED products. In the second half of this year, LGE will continue to expand the share of OLED TV in its product mixes, which would help increase its annual shipments slightly to 28.6 million units. In terms of SONY, it will strategically abandon some of its low-end and non-profitable products in order to maintain its brand positioning in the high-end market. As the result, SONY would post marginal decreases in annual shipments, which are estimated at 11.6 million units.Chinese TV brands are actively expanding in the global marketChinese brands TCL and Hisense have promoted their brand awareness during the World Cup, through celebrity endorsements and official sponsorships respectively. They took third and fourth place respectively in the second quarter shipment ranking although the stock up demand ended earlier than expectation. According to the forecast of WitsView, their shipments for the whole year of 2018 will be approximately 16.6 million and 13.8 million units.As the Chinese TV market gradually grows saturated, the expansion in overseas markets has become the key to the growth of Chinese TV brands. TCL has been actively expanding in North America and other overseas markets with its cost advantages brought by in-house panel supply from CSOT. Hisense also explored overseas businesses through the purchase of Toshiba Visual Solutions Corporation (TVS) and using the Toshiba brand for a period of 40 years. It is expected that Chinese brands will be increasingly influential in the global TV market.Surging panel prices in 3Q18 may become a potential risk for brands in the peak seasonEntering the third quarter, the prices for 32-inch panels have rebounded, leading to the price surge of panels of other sizes. To avoid panel shortages in the busy season, TV brands and OEMs have started to compete for panel supply and are willing to buy panels at higher prices. For the brands, they will be able to set the TV prices for promotions only when the panel prices are stable. Therefore, the rising costs of panel and supply uncertainties will bring potential risk to brands in the peak season
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Release time：2018-08-06 00:00 reading：1363 Continue reading>>

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