TV demand is weaker than expected, in part negatively impacted by FX. On a more positive note, 4K TV penetration to increase from low single digit in 2014 to the mid-teens in 2015. Panel makers attribute weaker sales in 1H due to the FX impact in Tier 1 markets like Europe and China which saw large currency fluctuations.
TV demand is weaker than expected, in part negatively impacted by FX. On a more positive note, 4K TV penetration to increase from low single digit in 2014 to the mid-teens in 2015. Panel makers attribute weaker sales in 1H due to the FX impact in Tier 1 markets like Europe and China which saw large currency fluctuations. A number of suppliers commented that price increases, used to combat impact from FX, have hurt demand. However, demand is expected to stabilize in 2H15,as FX volatility has subsided and panel makers push for more 4K TVs. A company we spoke with highlighted that manufacturing cost premium for a 4K TV vs. Full HD is about 15%, while retail prices are over 50% higher suggesting that retail prices have more room to decline, which should ultimately spur demand. It helps that Samsung is actively marketing 4K to improve penetration rates globally but as a result, panel component suppliers in Korea are likely to gain market share at the expense of theTaiwanese players. Our checks shows that TV size is rapidly getting bigger with 50” and above TVs becoming more affordable and a mainstream migration from Full HD to 4K TV.
