Yesterday (August 31), South Korean media reported that Samsung Electronics plans to significantly reduce TV panel production by 80%. Although Samsung subsequently issued a statement to deny it, the adjustment of the company's panel business is already considered inevitable by the industry.
On the same day, Sony, Toshiba and Hitachi announced the merger of the LCD panel businesses of the three companies. The newly formed company will become the world's largest manufacturer of small LCD panels.
In the LCD panel giants have adjusted their strategies, China's panel makers, which are converse, will undoubtedly take greater pressure.
LCD giant adjustment strategy
Yesterday, Sony, Toshiba and Hitachi said that the new company's merger business will be completed in the spring of 2012. According to the data, according to the market share of last year, Sony, Toshiba and Hitachi three companies accounted for 21.5% of the global market for small and medium-sized panels. Sharp accounted for 14.8% of the market, and Samsung Electronics accounted for 11.9% of the market. After the merger, the new company will surpass Sharp and Samsung Electronics to become the world's largest manufacturer of small LCD panels.
In addition, Samsung Electronics has also been reported to adjust its strategy. Yesterday, media reported that Samsung plans to reduce the monthly production of TV panels from the previous 1 million to 1.3 million to 200,000 to 300,000 by the end of this year.
Up to 80% of the reduction in production has attracted widespread attention in the industry. However, yesterday Samsung Electronics issued a statement denying this, saying that Samsung does not intend to artificially reduce production, but will be based on the actual situation to make flexible adjustments to meet customer needs.
However, in the eyes of the industry, Samsung’s main rival, LG, is unlikely to fail after the market plans to cut spending on the LCD panel business. The former’s LGD has announced a few days ago that it will reduce expenditures for the next year by a quarter. At the same time, the 8.5-generation line project that it plans to invest in China also pushes forward and the project is facing a “difficulty†situation.
The LCD industry is currently losing money
"Japan's integration and Samsung's production cuts are all to cope with the current sluggish state of the entire industry." Hong Shibin, vice chairman of the China Home Appliances Commercial Association Marketing Committee, believes that the global LCD panel industry is facing a continuous loss situation.
In the new quarterly reports submitted successively, LGD, Samsung, AUO, and Chi Mei and other industry giants are all consecutive losses. Among them, Chi Mei’s net loss of NT$1,301 million was already four consecutive quarterly losses. In the second quarter of this year, LGD suffered a loss of 48 billion won, which is the third consecutive quarterly loss as with AUO. Samsung’s display panel business suffered a loss of 210 billion won, only slightly better than the net loss of 230 billion won in the first quarter.
Liu Buchen, a senior observer of the home appliance industry, believes that the industry environment of the panel industry has changed. The panel production capacity at the end of 2010 has already met the demand of the current flat-panel TV market. With the saturation of the market, the panel industry has fallen into a crisis of overcapacity.
In addition, since May 2010, the global LCD panel prices have experienced a period of 11 months of continuous decline, Vice President of DisplaySearch Greater China Xie Qinyi pointed out, with LCD TVs, LCD monitors, laptops and other panel demand growth Slowing down gradually, the industry trend of continuous decline in panel prices is taking shape.
Samsung’s forecast for panel demand in the third quarter is “moderate growthâ€, and LGD’s forecast is that panel demand is expected to increase from September to October, but the supply-demand balance is unlikely to improve.
Liu Buchen believes that it is inevitable that the liquid crystal panel giants will adjust their strategies when the market is difficult to reverse and the demand for prices is low.
Domestic companies are under pressure
Compared with the slowdown of the international giants, panel companies in China are still rushing to build a line. In the case of poor market expectations, domestic panel companies will undoubtedly face greater pressure.
Following the completion of the 6th generation of the 6th generation of the Panda line at the end of the first quarter of this year, BOE (000725, SZ) Beijing Yizhuang's 8.5 line project was officially put into operation at the end of June.
According to statistics, BOE’s losses in 2010 exceeded RMB 2 billion, and in the first half of 2011, it was a loss of RMB 1.215 billion. The company expects the loss for the first three quarters of 2011 to be between 2.1 billion yuan and 2.3 billion yuan. If you do not turn a loss, the company may be ST at the end of this year.
“There is no way for expansion of Chinese panel companies.†Hong Shibin believes that Chinese companies must have breakthroughs in this industry, and it is impossible to let foreign brands master the panel core technology.
According to the latest news, BOE will also invest 22 billion in Inner Mongolia to build the first domestic 5.5-generation AM-OLED line. According to Zhang Yu, a spokesperson for BOE News, this is BOE’s “first step†in seizing the future of technology. However, according to Liu Buchen, BOE's OLED technology reserves are zero, and OLED technology has large investment and high costs. It will take a long time for mass production and replacement. BOE will undoubtedly bear tremendous pressure.
TCL pressure is not small. In early August, the 8.5-generation line of Huaxing Optoelectronics under the TCL Group was formally put into operation. Liu Buchen believes that whether the partners can eventually absorb some of the capacity of the line, how much of TCL's own digestion capacity is, and how large the market development of domestic counterparts is, which is unknown.
On the same day, Sony, Toshiba and Hitachi announced the merger of the LCD panel businesses of the three companies. The newly formed company will become the world's largest manufacturer of small LCD panels.
In the LCD panel giants have adjusted their strategies, China's panel makers, which are converse, will undoubtedly take greater pressure.
LCD giant adjustment strategy
Yesterday, Sony, Toshiba and Hitachi said that the new company's merger business will be completed in the spring of 2012. According to the data, according to the market share of last year, Sony, Toshiba and Hitachi three companies accounted for 21.5% of the global market for small and medium-sized panels. Sharp accounted for 14.8% of the market, and Samsung Electronics accounted for 11.9% of the market. After the merger, the new company will surpass Sharp and Samsung Electronics to become the world's largest manufacturer of small LCD panels.
In addition, Samsung Electronics has also been reported to adjust its strategy. Yesterday, media reported that Samsung plans to reduce the monthly production of TV panels from the previous 1 million to 1.3 million to 200,000 to 300,000 by the end of this year.
Up to 80% of the reduction in production has attracted widespread attention in the industry. However, yesterday Samsung Electronics issued a statement denying this, saying that Samsung does not intend to artificially reduce production, but will be based on the actual situation to make flexible adjustments to meet customer needs.
However, in the eyes of the industry, Samsung’s main rival, LG, is unlikely to fail after the market plans to cut spending on the LCD panel business. The former’s LGD has announced a few days ago that it will reduce expenditures for the next year by a quarter. At the same time, the 8.5-generation line project that it plans to invest in China also pushes forward and the project is facing a “difficulty†situation.
The LCD industry is currently losing money
"Japan's integration and Samsung's production cuts are all to cope with the current sluggish state of the entire industry." Hong Shibin, vice chairman of the China Home Appliances Commercial Association Marketing Committee, believes that the global LCD panel industry is facing a continuous loss situation.
In the new quarterly reports submitted successively, LGD, Samsung, AUO, and Chi Mei and other industry giants are all consecutive losses. Among them, Chi Mei’s net loss of NT$1,301 million was already four consecutive quarterly losses. In the second quarter of this year, LGD suffered a loss of 48 billion won, which is the third consecutive quarterly loss as with AUO. Samsung’s display panel business suffered a loss of 210 billion won, only slightly better than the net loss of 230 billion won in the first quarter.
Liu Buchen, a senior observer of the home appliance industry, believes that the industry environment of the panel industry has changed. The panel production capacity at the end of 2010 has already met the demand of the current flat-panel TV market. With the saturation of the market, the panel industry has fallen into a crisis of overcapacity.
In addition, since May 2010, the global LCD panel prices have experienced a period of 11 months of continuous decline, Vice President of DisplaySearch Greater China Xie Qinyi pointed out, with LCD TVs, LCD monitors, laptops and other panel demand growth Slowing down gradually, the industry trend of continuous decline in panel prices is taking shape.
Samsung’s forecast for panel demand in the third quarter is “moderate growthâ€, and LGD’s forecast is that panel demand is expected to increase from September to October, but the supply-demand balance is unlikely to improve.
Liu Buchen believes that it is inevitable that the liquid crystal panel giants will adjust their strategies when the market is difficult to reverse and the demand for prices is low.
Domestic companies are under pressure
Compared with the slowdown of the international giants, panel companies in China are still rushing to build a line. In the case of poor market expectations, domestic panel companies will undoubtedly face greater pressure.
Following the completion of the 6th generation of the 6th generation of the Panda line at the end of the first quarter of this year, BOE (000725, SZ) Beijing Yizhuang's 8.5 line project was officially put into operation at the end of June.
According to statistics, BOE’s losses in 2010 exceeded RMB 2 billion, and in the first half of 2011, it was a loss of RMB 1.215 billion. The company expects the loss for the first three quarters of 2011 to be between 2.1 billion yuan and 2.3 billion yuan. If you do not turn a loss, the company may be ST at the end of this year.
“There is no way for expansion of Chinese panel companies.†Hong Shibin believes that Chinese companies must have breakthroughs in this industry, and it is impossible to let foreign brands master the panel core technology.
According to the latest news, BOE will also invest 22 billion in Inner Mongolia to build the first domestic 5.5-generation AM-OLED line. According to Zhang Yu, a spokesperson for BOE News, this is BOE’s “first step†in seizing the future of technology. However, according to Liu Buchen, BOE's OLED technology reserves are zero, and OLED technology has large investment and high costs. It will take a long time for mass production and replacement. BOE will undoubtedly bear tremendous pressure.
TCL pressure is not small. In early August, the 8.5-generation line of Huaxing Optoelectronics under the TCL Group was formally put into operation. Liu Buchen believes that whether the partners can eventually absorb some of the capacity of the line, how much of TCL's own digestion capacity is, and how large the market development of domestic counterparts is, which is unknown.
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