Home LCD TVs (29-inch and above)

	Mainland China's Huipu has model LWD400-SE, a 40in LCD TV with a Samsung panel and 1366x768 pixel resolution.

Makers are exploring wider sourcing options to ensure panel supply. Niche markets are sought to avoid competition.

Home LCD TV manufacturers in mainland China, Hong Kong, Taiwan and South Korea have been positioning their products in strategic markets where competition with major players is less intense to keep the line on a growth path.

The focus of suppliers on the mainland is mainly on 32in and smaller LCD TVs. Most Hong Kong companies are not going beyond the 42in barrier, while South Korea makers have their eye on the 40in and above segment in emerging markets. Least affected by the competition and benefiting from the rivalry is Taiwan, with its established and strong OEM background with known brands.

The line in general faces the challenge of increasing costs in terms of materials, components and labor. Except in South Korea where makers report a stable panel situation, the supply in the other regions remains volatile, especially of popular panel sizes since 2007. To ensure this does not affect delivery lead times, LCD TV manufacturers have taken to stocking up or forging ties with a broader number of panel suppliers. Labor cost has also increased with the implementation of new laws in mainland China, which hosts most Greater China makers' manufacturing operations.

Despite these difficulties, the number of active manufacturers—including not only TV specialists but also makers of other consumer electronic products—remains steady. Some of these suppliers are even positive about achieving higher output this year. Exports continue to drive production with Europe and North America as main destinations, and emerging markets such as Asia and the Middle East expanding opportunities for both their own brands and OEM businesses.

	The 68 LCD TV Series from Hong Kong's Asano is available in 26in and 32in models and supports 1080i/720p HDTV.

The mainland China LCD TV industry has experienced dramatic development in the past five years. Custom statistics show that the region exported 17.03 million LCD TVsfrom January to October 2007, with a y-o-y increase of 47 percent. But the ensuing tight panel supply, specifically of 26in to 37in panels, has dampened expectations for 2008. Makers forecast their output this year will remain at 2007 levels for units in these sizes.

Some makers are broadening their sourcing options to secure their panel supply. "We only sourced LCD panels from Samsung Electronics, but to ensure a steady supply chain we have added AUO and CMO to our supplier list since late 2007," said Jennifer Lee, sales manager at Huipu Electronic (Shenzhen) Co. Ltd. "We have also set up a sourcing schedule based on annual production plans."

Hong Kong THTF Co. Ltd has established strategic cooperation deals with major panel suppliers such as CMO, AUO and LG Display to widen its panel sources. The company also draws up warehousing plans based on market demand projections six months ahead of time. This strategy is also being done by Suzhou Luck Electronics Co. Ltd.

The supply of larger screens is expected to be more stable as 7G panel production goes online this year. However, mainland China makers of LCD TVs—numbering about 80—are seen steering clear of the segment dominated by major players such as Samsung and Sony. Instead, they mostly export smaller-screen TVs in sizes of 15in, 19in, 22in and 32in. To sustain their TV business against the component shortage, some makers have also begun reinforcing their plasma TV line, especially with the production expansion of PDPs and the release of new-generation 32in panels.

Despite these drawbacks, the LCD TV industry remains growth-driven based on the fierce price war in the market. According to Displaybank, the worldwide average retail prices of 32in and 42in LCD TVs were $832 and $1,396 in February 2008, with a y-o-y reduction of 20 percent and 21 percent, respectively. In the domestic mainland market, sales of LCD TVs are driven by an increasing number of households upgrading their CRT sets—a trend expected to hold in the next few years. More so in 2008 because of the Beijing Olympics, which makers see as an opportunity for self-promotion.

About 80 percent of mainland China LCD TV suppliers are based in Guangdong province. Among them are leading manufacturers in the region, such as Konka Group Co. Ltd, TCL and Skyworth. Another industry leader, Changhong based in inland Sichuan province, has set up a manufacturing facility in Guangdong for its export business. Other major players are operating elsewhere in other coastal regions. Xoxeco based in Xiamen, Fujian province, is constructing a new industrial zone with an annual capacity of 8 million to 10 million flat-panel TVs. Hisense and Haier are based in Qingdao, Shandong province. Buyers can also find LCD TV suppliers in Jiangsu province and Shanghai.

In Hong Kong, majority of its 20 LCD TV suppliers focus on the lower-size LCD TV market, specifically on 19in, 20in, 26in, 32in and 42in units. Only a few actively develop and promote 42in and larger units due to the domination of major brands in this segment.

To avoid competition and grab market share, companies from the special administrative region try to find a niche for their products. HongKong Chusei Digital Technology Co. Ltd, for instance, focuses on Japan with its ISDB-T TVs and on Europe as a secondary market.

Sentronic International Ltd has been active in own-brand promotion in electronic retail stores to demonstrate its after-sales, logistics and technical support capabilities. It obtained the Creation brand from Japan. "When overseas OEM customers visit us, we bring them to reputable retail stores here in Hong Kong to show them that distributors trust us. We want them to understand that what we provide is not merely a product, but complete after-sales, logistics and technical services," said sales manager Franky Ho. Sentronic believes promotion of its Creation LCD TVs will boost the company's OEM business in the long run.

Asano International Ltd specializes in the manufacture of large-volume and competitively priced LCD TVs. The company leverages its CRT TV and component manufacturing background to effectively manage overall production costs.

Hong Kong exported 3.8 million LCD TVs in 2007, based on customs statistics. Total shipment value reached $423 million, a 15.6 percent y-o-y increase.

	AsusTek of Taiwan offers 32in, 37in and 42in LCD TVs.

Taiwan's LCD TV production is projected to continue on a remarkable uptrend, with shipments forecast to post up to 86 percent y-o-y growth this year. Based on Topology Research Institute (TRI) estimates, the island's shipments for 2008 will reach 28.05 million units, from 15.05 million units last year, and will account for up to a 25 to 27 percent share of the world market. Production value is projected to jump by 103 percent from $6.8 billion in 2007 to $13.8 billion this year.

This development contrasts with other worldwide markets, which remain on a growth path but at a slower pace than in previous years. According to TRI, global production value is expected to touch $85 billion this year from $68 billion in 2007, posting a 25 percent y-o-y growth. In Q4 2007, growth slowed to 54 percent from 110 percent the previous year. For North America, it was 64 percent from 150 percent. TRI's projection for 2009 is still optimistic, with global production value to go up 9 percent to $92.6 billion.

Taiwan's driving force resides on the island's strong OEM business ties with established international brands, as well as in the increasing production of new brands. The worldwide LCD TV market is dominated by five vendors, including Sony, Sharp and LG. These companies are reportedly increasing their outsourcing ratio in 2008, from which Taiwan makers expect to benefit. Toshiba, for one, is said to target a 40 to 50 percent increase. Likewise with Philips, which is expected to release more OEM orders this year.

Other industry drivers for Taiwan are the upcoming Beijing Olympics and Blu-ray's emergence in the DVD format war—both of which will be instrumental in further promoting high-definition content and displays.

But like their mainland China and Hong Kong counterparts, Taiwan suppliers also face similar challenges in rising labor cost and LCD panel supply. The newly implemented labor policies on the mainland, where most Taiwan companies set up factories, are expected to effect between 10 and 20 percent increase in manufacturing cost, further compounded by surging raw material costs. To counter the panel supply problem, TV makers and panel manufacturers on the island forge cooperation deals for their mutual benefit.

Taiwan's supplier base consists of IT and home appliance manufacturers. The new entrants are final-assembly companies. At present, there are 25 active suppliers in the region, which include large players AsusTek Computer Inc. and BenQ Corp., which were interviewed for this report, as well as Amtran, Chimei, Foxconn, Jean, Kolin, Proview, Qisda, Quanta, Tatung, TPV and Wistron. Some have their own panel factories, while others have established tie-ups with panel makers to secure their panel supply. Most of the companies have factories in mainland China, with Suzhou being one of the important hubs.

In South Korea, small and medium-sized LCD TVs manufacturers are concentrated on large-screen models with sizes above 40in, expecting to corner markets free from competing major players and mainland China rivals. These targets are the emerging markets in Russia, India, Brazil and mainland China. Makers' bright outlook is buoyed by the stable supply and cost of LCD panels in their region, which help them focus their efforts on competitively priced products with enhanced quality, form factor and add-on features.

South Korea has 59 LCD TV makers and expects few entrants due to the region's saturated home LCD TV market. This is despite DisplaySearch's rosy projections of a higher global output reaching 106 million LCD TVs in 2008, from 79 million units in 2007. DisplaySearch reported that 25 percent of this 2007 shipment came from South Korea's two top TV makers. In 2011, the worldwide LCD TV production is forecast to climb to 150 million units.

Conscious of the stiff competition in this booming consumer market, a number of South Korea suppliers are diversifying to industrial applications, including digital information displays, IPTVs and 3D TVs.

In terms of screen sizes, 32in LCD TVs are expected to take the biggest chunk of the global market while 40in and above units will account for 30 percent.

	The NLF42-ANS1M6U 42in full HD LCD TV from South Korea's Hulif has 10,000:1 contrast ratio. It has two HDMI ports and can be rotated at a 20˚ angle.

Mainland China's Hong Kong THTF forecasts up to a sixfold output increase in 2008, from 300,000 LCD TVs last year. Another mainland supplier, Huipu, anticipates its output to double this year. It produced 75,000 LCD TVs in 2007. Hong Kong-based Asano projects its overall LCD TV shipment to double during 2008. Taiwan companies AsusTek and BenQ also expect growth, with the latter anticipating this year's output to reach 2 million LCD TVs from 400,000 units in 2007. South Korea's Hyundai IT Corp. will increase its LCD TV production from 40,000 units in H1 2008 to 60,000 units in H2 2008.

Hong Kong THTF, the overseas marketing division of THTF Group, mainly produces 15in to 52in LCD TVs, 32in to 60in plasma TVs, digital photo frames and mobile phones. The company's flat-panel TV manufacturing facility is in Shenyang, Liaoning province. It is equipped with six production lines and has the capacity to turn out 1 million to 1.2 million flat-panel TVs a year.

Huipu was established in 1997 as a maker of computer monitors, and started producing flat-panel TVs in 2000. Its LCD TV line consists of 15in to 46in units, with a new 52in model due for release later this year. The supplier has a 15,000sqm factory in Shenzhen, with a monthly capacity of 35,000 plasma and LCD TVs. It also maintains an assembly factory in Germany to enable smoother entry into that market.

Konka, one of mainland China's biggest electronics enterprises, is mainly focused on color TVs, set-top boxes, in-car entertainment devices and mobile phones. The company operates five production centers on the mainland, as well as three factories in India, Indonesia and Mexico. The factories' total annual production capacity is up to 6 million color TVs.

Suzhou Luck, established in 2002 as a CRT TV maker, entered the LCD TV sector in 2006. Its product line consists of 14in to 34in CRT TVs, 15in to 42in LCD TVs and digital TV set-top boxes. At present, LCD TVs account for 30 percent of Suzhou Luck's total sales. The maker's 15,000sqm factory in Suzhou, Jiangsu province, employs 400 workers. CMO is its major panel supplier.

Asano offers TV components and finished, CKD and SKD versions of CRT and LCD TVs. It has two factories in Guangdong province, mainland China. The supplier carries out CRT TV manufacturing and SMT processes in Foshan, while LCD TVs are assembled in Huizhou. The two factories have a combined workforce of 2,500 and more than 20 plastic injection machines. Asano started with CRT TV manufacturing and released its first LCD TV in 2005. The manufacturer's current production capacity for LCD TVs is 150,000 units per month. During peak seasons,the company can further convert its CRT TV production lines for LCD TV assembly. Its average monthly output is 50,000 LCD TVs. The company works closely with component suppliers Philips, Mitsubishi, Sanyo and Toshiba during new product development.

HongKong Chusei has been manufacturing a wide array of consumer electronic products such as LCD TVs, handheld TVs, portable media players, digital photo frames, mobile phones, navigation systems and audio devices since 2003. It owns a 526,091sqm industrial area consisting of eight buildings in Shanghai. The plant is equipped for key production processes such as assembly, injection molding, SMT and cabinet painting. More than 1,100 employees work in the factory, which can turn out up to 50,000 LCD TVs per month. HongKong Chusei also runs an R&D center in Shenzhen, Guangdong, where about 15 engineers are stationed.

Established in 1996, Sentronic is a subsidiary of components manufacturer Ringford Products Ltd. In addition to LCD TVs, the supplier also offers digital set-top boxes. Sentronic is able to provide complete OEM services from design to manufacturing. It has strong R&D capability and experienced quality control, logistics and technical support teams. Sentronic's LCD TVs are manufactured in Zhuhai, Guangdong. The factory mainly houses assembly, testing and R&D facilities, while SMT and cabinet making are outsourced. About 400 staff are employed in the factory, including 50 R&D engineers. The factory can produce 100,000 LCD TVs per month.

Sentronic sets aside an annual budget for new TV cabinet tooling. Its OEM customers can choose from about 15 TV cabinet designs. Part of the company's expertise is the localization of its LCD TVs to the requirements and technical standards of different markets. "We already know the unique technical requirements for various countries, especially for digital TVs, so we don't have to conduct new intensive research," said sales manager Franky Ho.

AsusTek, one of the leading IT companies in the world, started to produce LCD TVs in 2005. So far, it has focused on own-brand business. Compared with the company's other product lines, such as motherboards, notebook PCs and LCD monitors, LCD TV is a new product line with sales volume yet to grow. AsusTek offers 32in, 37in and 42in LCD TVs.

Thanks to AUO's assured LCD panel supply, BenQ produces both LCD monitors and LCD TVs. The company's TV line consists of 26in, 32in, 37in and 42in units.

South Korea's DM Technology Co. Ltd has two factories in mainland China and the Netherlands. It has 60 R&D staff that can introduce about 20 new models per year. Hyundai IT has two factories—one in Gimcheon, South Korea, and the other in Germany. It has a 40-member R&D team and releases 15 models a year.

	Hong Kong-based Asano offers the 65 Series, which features 26in and 32in LCD TVs with optional built-in DVB-T or ATSC tuners.

The bulk of shipments from mainland China, Hong Kong, Taiwan and South Korea LCD TV suppliers is bound for overseas destinations and comprises mostly OEM orders with a few under house brands.

Huipu is one company that promotes its HPC brand in the domestic market and some overseas destinations such as Singapore, South Africa and Saudi Arabia. The maker exported 70 of its output in 2007, mainly to European Union countries. But due to the rapidly developing domestic market, the maker will reduce its export ratio to 50 percent this year.

Hong Kong THTF exports 80 percent of its total production via OEM/ODM orders. It will promote its own brand at major trade shows this year. Konka ships 30 percent of its total output to the US, Canada and Australia. Suzhou Luck ships all its products, mainly to Australia and Southeast Asia.

Forty percent of Hong Kong-based Asano's output goes to Europe, 25 percent to South America, 15 percent each to Australia and Africa, and 5 percent to the domestic Hong Kong market. Less than 2 percent of Asano's LCD TV output is sold under its own brand. Asano also expects to begin shipping to Eastern Europe and Mexico this year. Japan and Europe are HongKong Chusei's main export markets for its LCD TVs, while Sentronic's are Australia and France. All of Sentronic's shipments are made to OEM customers.

Most contacted Taiwan companies export between 70 and 90 percent of their production, mainly under OEM contracts. They also ship off-brand products to Europe and North America, as well as to Southeast Asia, the Middle East and Russia.

South Korea's DM Technology sends all its LCD TV shipments to Europe, North America, the Middle East and other regions. Eighty percent of its output is marketed under its own brand and the remainder under OEM orders.

Hulif Co. Ltd has been supplying one of the global TV makers in the US and Europe's major wholesale retail marts. These regions will remain the company's major overseas markets this year. OEM orders comprised about 90 percent of Hulif's LCD TVs in 2007. The company introduces about 10 new products per year. It has 20 R&D engineers in its employ.

Hyundai IT produces 80 percent of its home LCD TVs under its own brand and exports 90 percent of the output primarily to Europe and Japan.