SANTA CLARA, CALIF., July 11, 2011TV brands have been adjusting their 2011 LCD TV business plans downward at a rapid pace, in acknowledgement of the fact that end-market demand is not what they had expected. However, TV brands and OEM/ODM makers are still planning to increase their Q311 production plans in order to meet demand for the upcoming holiday season. According the latest DisplaySearch MarketWise-LCD Industry Dynamics, the combined production plans for the top sixteen LCD TV brands will increase from 14.4 million in July to 16.9 million in August, and then 19.4 million in September. At the same time, LCD TV subcontract manufacturers (OEM/ODM) are planning to increase their production from 3.9 million in July to 4.7 million in August, and then 5.4 million units in September.
Figure 1: LCD TV Brand Production Plans
Source: DisplaySearch MarketWise- LCD Industry Dynamics
In May, the top brands missed their LCD TV set production targets by 10%, due to weaker-than-expected sell-through in the market, particularly in Western Europe and North America. To ease the inventory risk and better control over the supply chain, most TV brands are being cautious in their production plans, including Chinese TV vendors.
According to Deborah Yang, Research Director of DisplaySearch, The slowing market demand, combined with competition for market share, has led LCD TV makers to focus on lower-cost models and price promotions in 2H11. Yang added, Its believed that price elasticity still exists in certain main regions, but LCD TV brands remain cautious in their plans. Many brands are struggling with weak sales in developed markets and are undertaking inventory clearance in Western Europe.
May LCD TV production by the top seven Taiwan OEM makers increased by 13% M/M, which was in line with their forecast. Cost competitiveness and integrated business models are enabling OEM makers like Briview, Compal, Foxconn, Chimei Innolux, and TPV to increase orders from TV brands. In Q311 OEM makers are targeting 14 million, up 24% Q/Q from Q211.
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