Due to TV panel shortages in 2017, top television makers will increase panel orders from 34% in 2016 to 41% from respective panel suppliers.
This year will be a tough one for Samsung Electronics, LG Electronics, TCL and Sharp as TV panel shortages continue into 2017. Top TV brands are looking into sourcing more panels from respective suppliers, researchers said in an IHS Markit report.
The Top TV makers are set to increase panel orders to 41%, from 34% in 2016, from panel suppliers such as Samsung Display, LG Display, China Star and Sharp (Foxconn).
Sharp is expected to increase orders the most from its captive panel supplier from 36% in 2016 to 93% in 2017. Samsung Electronics, on the other hand, is set to expand its panel purchases from its main supplier, Samsung Display, from 32% in 2016 to 39% in 2017, but the increase in orders could be constrained due to the panel maker’s planned cut in its TV panel capacity this year.
Increasing orders from their respective supplier shows a different strategy from top-tiers such as Samsung and LG in the past two years as they diversified their panel suppliers. The brands had sourced orders from Chinese and Taiwanese panel makers, partly to become cost competitive. In early 2016, they had planned to further lower panel orders from their main panel suppliers, but ongoing panel shortages had forced them to restrategise.
IHS Markit director Deborah Yang says TV makers faced panel supply shortages and the unexpected hike in panel prices, which eroded their profit margin. The industry was further strained when Foxconn, which acquired Sharp last year, stopped supplying panels to Samsung Electronics for 2017.
TV makers have to secure a stable panel supply should they want to focus on the TV panel industry, researchers said. They are expected to become more reliant on their captive panel suppliers than from other sources in 2017.