Growth slows for low-tier TV OEMS in China

graph showing growth in low-tier TV OEM market in China

Following the decline in demand growth for televisions globally, low-tier manufacturers in China are findings it challenging to grow profitably, according to research from IHS.

IHS state that many low-tier manufactures that moved into the market quickly a few years ago and recorded notable shipment growth, are now facing problems.  

Unit shipments from original equipment television manufacturers (OEMs) in China grew 9 percent year over year in 2015. The BOE Group’s original design manufacturer (ODM) strategic business unit led this growth, whilst others – including AMTC, HKC, KTC – suffered. This is largely due to BOE offering a complete integrated display package and expanding its assembly efforts.

BOE’s TV OEM business is expected to squeeze out competing low-tier Chinese TV makers in 2016 and pressure them to reduce costs, especially for 19-in, 24-in, 32-in and 43-in sizes.

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

In the first half of 2016, BOE’s TV set division aims to expand its TV size range to focus on supplying larger displays in the future, including 55-in displays.

“BOE’s TV OEM business will need to quickly catch up and make itself competitive in large-screen TV manufacturing, but 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,” added Jiang.

IHS produced the analysis from its TV Display Supply Chain Tracker in China.