According to research of the Taipei-based Market Intelligence & Consulting Institute (MIC) conducted as part of the ITIS project, due to the uncertainty in the development of the overall economy in 2009, demand for LCD (Liquid Crystal Display) TVs remains unclear, affecting TV makers' order schedule and product development. Furthermore, LCD TV brand-name vendors have been cautious in their outlook for 2009. Consequently, orders for contract manufacturers in the first half of 2009 are expected to be below original expectations.
As the Japanese Yen has recently been appreciating, outsourcing orders has become relatively cheap. Due to the strong Japanese Yen and instability of other currencies, Taiwanese makers have opportunities to secure more orders from Japanese vendors. This is likely to be one of the key growth factors for the Taiwanese LCD TV industry in 2009.
As for the first quarter of 2009, traditionally an off season, some brand-name vendors were more conservative in their outlook, reducing their outsourcing orders to Taiwanese LCD TV manufacturers. Moreover, some brands did not launch new models in the first quarter. It was expected that Taiwanese LCD TV industry shipment volume would drop approximately 21.7% sequentially to about 4.05 million units in the first quarter of 2009.
According to MIC Industry Analyst Patrick Chan, "aiming to avoid risks stemming from currency exchange rates and in-house production, Japanese vendors have begun increasing their orders outsourced to Taiwanese makers. In China, LCD TVs have entered third- and fourth-tier cities in China, which is expected to boost LCD TV penetration in the country. Therefore, Taiwanese makers, which are developing the Chinese market through contract production or own brands, could see shipment increases. In the second quarter of 2009, Taiwanese LCD TV shipment volume is expected to grow 13.4% sequentially to 4.60 million units."
"Taiwanese LCD TV shipment volume in the fourth quarter of 2008 did not enjoy a double digit sequential growth rate that the industry experienced in the same period of the previous year", said Mr. Chan. "This was due to the fact that in the fourth quarter, traditionally a peak season, LCD TV demand did not grow significantly due to the global financial turmoil. As a result, some brand-name clients reduced their orders outsourced to Taiwanese makers, affecting Taiwanese shipments in the fourth quarter." However, Mr. Chan added that "the Taiwanese industry's shipment volume in the fourth quarter of 2008 still managed to arrive at 5.18 million units, representing 0.7% sequential growth and 4.1% year-on-year growth. Brand-name vendors' aggressive year-end promotions and price declines of LCD TV products somewhat softened the impact of the global economic situation on the industry in the fourth quarter of 2008."
Meanwhile, Taiwanese LCD TV shipment value in the fourth quarter of 2008 suffered a 0.8% sequential decline and 9.8% year-on-year decline. Important factors behind this development were the continuing declines in LCD TV panel prices and the increased shipment share of small-sized LCD products. ASP (Average Selling Price) of the Taiwanese industry fell 2.1% in the fourth quarter to US$373.
More information can be found in the following MIC report: The Taiwanese LCD TV Industry, 1Q 2009
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About MIC
Market Intelligence & Consulting Institute (MIC), based in Taipei, Taiwan, was founded in 1987. MIC is Taiwan's premier IT industry research and consulting firm providing intelligence, in-depth analysis, and strategic consulting services on global IT product and technology trends, focusing on markets and industries in Asia-Pacific. MIC is part of the Institute for Information Industry. https://mic.iii.org.tw/english
About ITIS
The Industry and Technology Intelligence Services (ITIS) project is managed by the Department of Industrial Technology of Taiwan's Ministry of Economic Affairs. As part of the project, research is conducted in a variety of fields, including the ICT sector. The project serves both the public and private sector.