Samsung raises TV shipments and substantially increases its purchases of LCD panels from China

by:Kimeery     2021-06-04

Samsung Electronics has increased its purchases of LCD (liquid crystal display) products from China after increasing its TV shipments this year.

According to South Korea’s 'Joongang Ilbo' report, on September 20, news from the Korean display industry said that Samsung Electronics’ Video Display (VD) business unit plans to do so by the fourth quarter of this year (October to December) Increase the purchase of 10.5 generation liquid crystal display (LCD) panels from Chinese companies such as BOE and China Star Optoelectronics.

Market research agency IHS Markit also predicts that 'South Korean TV manufacturers will take advantage of the opportunity of falling LCD prices to increase their purchases of Chinese-made panels.'

Analysis believes that Samsung Electronics increased its purchases of LCD panels made in China because Samsung Electronics raised its annual TV shipment target. Samsung Electronics recently raised its target for TV shipments this year to 42.5 million to 43 million units, which is not only higher than last year’s estimated shipment value (41.4 million units), but also higher than the expected value at the beginning of this year (42 million units). Out of it.

Analyzed that Samsung’s move is to increase product share in both sales and sales volume.

It is understood that China Star Optoelectronics (CSOT), a subsidiary of TCL, is Samsung’s Chinese competitor in the TV market, but Samsung has signed a strategic partnership with it. The company Samsung Display invested 2.1 billion yuan in Huaxing Optoelectronics' factory in Shenzhen and purchased a 9.8% stake in the factory. It is reported that about 10% of the 10.5-generation LCD panels produced by the factory are supplied to Samsung Electronics.

China Star Optoelectronics' 10.5 generation LCD factory was completed last year, but due to the relatively low product qualification rate, it is relatively difficult to operate. Starting from the second half of this year, the factory's product qualification rate has increased significantly, and the total amount of products supplied to Samsung Electronics has also increased.

IHS Markit said that among Samsung Electronics’ annual TV shipments (44 million units) this year, only 37.7% (16.6 million units) were purchased from Samsung Display’s LCD panels. During the same period, Samsung Sixty percent of electronic TV products (61.4%) use LCD panels from Chinese and Taiwanese suppliers.

According to the report, for Samsung Electronics, large-scale purchases are made when the price of LCD has fallen to close to the cost price. Together with Samsung’s signal processing technology and optical technology, it can be used at lower cost Large-scale production of TV products.

Samsung Electronics plans to focus on the development of the TV industry in the short term on large-scale products and the promotion of 8K products, and it is negative about the development of organic light-emitting diode (LCD for Samsung) panels. This is because it is more advantageous to use LCD panels with a high pass rate when manufacturing ultra-large televisions of 85 inches or more with large profit margins. At the same time, Samsung Electronics believes that its subsidiary Samsung Display’s plan to develop 'QD-LCD for Samsung' is not in line with its own strategy.

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