Channel distributors’ high inventory levels peg back TV Q2 LCD TV shipments

Channel distributors’ high inventory levels peg back TV Q2 LCD TV shipments
Joseph O'Halloran
| 01 August 2018

Global shipments of LCD TV sets totalled 47.75 million units for the second quarter of 2018, a quarterly decrease of 3.8% as a result of the high inventory level of channel distributors according to research from WitsView.
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The analyst believes that the key driver for the fall was the recent surge in panel prices, an ongoing situation which it believes will bring more uncertainties in the second half of this year. Given the lower-than-expected shipments in 2Q18, WitsView now expects the shipments for the whole year to increase by 2.3% year-on-year to 215.7 million units, lower than the previous forecast of 219 million.

“The TV market had remarkable shipments in the first quarter thanks to the stock-up demand for the World Cup”, explained Jeff Yang, the research manager of WitsView. “However, the high inventory level of channel distributors has affected the market since the second quarter.” As the result, TV brands have adjusted their shipping schedules and panel purchases. Despite the upcoming peak season in the third quarter, it would be difficult for TV brands to offer promotions if the panel prices surge too high. The demand would also be restrained by the high panel prices.

One company to suffer during the quarter was Samsung, whose attempts to capture more of the high-end market segment with its QLED TVs was hit by lower than expected sales in the fierce competition with OLED TVs even though the Samsung technology enjoys cost advantages thanks to the low panel prices. Overall, WitsView calculates that its annual TV shipments will now decrease to 41 million units.

By contrast, LG Electronics (LGE) and Sony achieved better-than-expected profitability in Q2 2018 and maintained a healthy level of inventory thanks to continued promotion of OLED products. have adopted less aggressive strategies, taking respective second and fifth place in the 2Q18 shipment ranking. WitsView forecasts that in the second half of this year, LGE will continue to expand the share of OLED TV in its product mixes, helping increase its annual shipments slightly to 28.6 million units. It believes that Sony will strategically abandon some of its low-end and non-profitable products in order to maintain its brand positioning in the high-end market and as a result post marginal decreases in annual shipments, estimated at 11.6 million units.