Top TV Brands Increase Orders from Captive Panel Suppliers Amid Supply Shortage in 2017, IHS Markit Says
January 23 2017 - 9:20PM
Business Wire
As TV panel shortages continue into 2017, top TV brands are
currently reviewing plans to source yet more panels from their
captive panel suppliers this year, according to IHS Markit (Nasdaq:
INFO), a world leader in critical information, analytics and
solutions.
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The world’s top TV makers -- Samsung Electronics, LG
Electronics, TCL and Sharp -- are forecast to sharply increase
panel orders from their respective panel suppliers, Samsung
Display, LG Display, China Star and Sharp (Foxconn) to 41 percent
of all total orders in 2017 from 34 percent in 2016.
Increasing orders from the same captive supplier marks a
different strategy from the previous two years, when top-tier
brands such as Samsung Electronics and LG Electronics diversified
their panel suppliers by sourcing orders from Chinese and Taiwanese
panel makers, in part to become more cost competitive. In early
2016, they had planned to further lower panel orders from their
main panel suppliers, but ongoing panel shortages had forced a
rethink in their sourcing strategy.
“2016 was a very challenging year for TV makers due to panel
supply shortages and the unexpected hike in panel prices, which
eroded TV makers’ profit margins,” said Deborah Yang, director of
display supply chain at IHS Markit. “Moving into 2017, there is
still a concern that constraints in panel supply will continue, and
this makes TV makers feel insecure about the stability of future
supply.” A recent decision made by Foxconn, which acquired Sharp in
2016, to stop supplying panels to Samsung Electronics in 2017 also
fueled the concern, Yang said.
Choosing to hold their positions in the TV market as a top
priority, top TV makers are more concerned about securing a stable
panel supply above all else. They are expected to become more
reliant on their captive panel suppliers than from other sources in
2017.
According to the latest IHS Markit TV Display Intelligence
Service report, Sharp is expected to increase its orders the most
from its captive panel supplier among all other TV makers from 36
percent in 2016 to 93 percent in 2017. Similarly, Samsung
Electronics is also forecast to expand its panel purchases from its
main supplier, Samsung Display, from 32 percent in 2016 to 39
percent in 2017, but the increase in orders could be constrained
due to the panel maker’s planned cut in its TV panel capacity in
2017.
“Being able to secure a competitive panel supply base will be TV
makers’ top priority in 2017,” Yang said. “Increasing supplies from
captive panel suppliers will be a critical tactic although having
multiple sources will be also an important strategy to win in a
competitive and cost-sensitive market.”
About IHS Markit
(www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical
information, analytics and solutions for the major industries and
markets that drive economies worldwide. The company delivers
next-generation information, analytics and solutions to customers
in business, finance and government, improving their operational
efficiency and providing deep insights that lead to well-informed,
confident decisions. IHS Markit has more than 50,000 key business
and government customers, including 85 percent of the Fortune
Global 500 and the world’s leading financial institutions.
Headquartered in London, IHS Markit is committed to sustainable,
profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd. All
other company and product names may be trademarks of their
respective owners © 2017 IHS Markit Ltd. All rights reserved.
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