Chinese OEMs May be Forced Out of TV Market

The global slowdown in the market for TVs is making it difficult for vendors in China to grow profitably, reports IHS. Many low-tier makers, who rushed into the market and recorded high shipment growth in recent years, are now facing challenges.

IHS’ data shows that unit shipments from low-tier Chinese OEMs grew just 9% YoY in 2015, led by the BOE Group’s ODM strategic business unit. Other players such as AMTC, HKC and KTC suffered declines.

“TV OEMs in China are still hoping for strong shipment growth in 2016, but that hope could turn out to be overly optimistic,” said analyst Nick Jiang. “The TV market has become saturated, and competition between OEMs and branded companies continues to intensify, which is making profits harder to achieve.”

Chinese OEMs are finding it particularly difficult to compete against BOE, as this company is focusing on growing its TV assembly business and completing a fully-integrated display business within the Group. IHS expects that BOE’s TV OEM division will squeeze other low-tier Chinese makers out of the market this year and put pressure on others to lower their costs. This will especially apply to 19″, 24″, 32″ and 43″ sizes.

BOE’s TV set division is aiming to upgrade its size mix in the first half of the year to include 55″+ displays. However, “it will take some time for the company to convince customers that it is capable of supplying the needed volume and with the required quality,” said Jiang.