Despite strong orders for TV panels in Q1, China's top six TV makers showed no qualms about restraining purchases in Q2. The result? A total volume of 18 million units during the quarter—about 2 percentage points higher than forecast.
China’s biggest TV makers are, in fact, continuing to hold some inventory and are not pressured overall to hunt for panels with any urgency. However, what keeps them buying is a combination of fear over panel supply constraints and attendant risks on the one hand, and the need to hit aggressive shipment targets on the other if they wish to achieve for the second half of this year their lofty goals in both the domestic and overseas markets.
The following chart shows TV-panel purchase volumes from China’s top six TV makers and what their forecast plans had called for in Q2. On the whole, the Q2 numbers represented a solid 10% increase from Q1 figures.
With the exception of Skyworth, which is carrying a higher level of overstocked panels, the other five Chinese TV makers all plan to further increase panel purchasing in Q3, estimated to exceed 19 million units—equivalent to an increase of 10% from Q2, or to growth of 27% when compared to year-ago levels.
The Q3 projected purchasing plan is also about 10 percentage points higher than what was previously forecast, with the considerable upsize in panel purchasing thanks mainly to TCL and Hisense, the top two makers for the quarter. The two aim to aggressively drive higher shipments for their overseas markets, gunning in particular for the mammoth US Black Friday promotional deals with North American retail giants.
Aside from TCL and Hisense, the other Chinese TV makers on the top 6 list included, in descending order, Skyworth, Changdong, Konka and Haier.
David Hsieh is Director of Analysis & Research within the IHS Markit Technology group