Domestic LCD-TV Makers Develop Offshore Production and Marketing
Jan 11, 2005 Ι Industry In-Focus
Ι Electronics and Computers Ι By Quincy, CENS
Three of Taiwan's leading home-appliance makers—Teco, Sampo, and Kolin—are developing overseas production networks for liquid crystal display (LCD) TV products in a bid to gain stronger competitiveness.
Sampo, for instance, recently announced plans to move its global LCD and plasma display panel (PDP) production base to Kunshan, in mainland China's Jiangsu Province. The company also plans to cooperate with a partner in Mexico for the joint development of the American market.
The Kunshan plant will turn out products for the mainland market through Sampo's sales branches there. The firm's own-brand TVs may also be marketed in Europe, according to a company official. Talks are under way with a contract partner in Milan, Italy for the local assembly of Sampo-brand LCD-TVs for regional sales.
The official reports that the Sampo group exported about 50,000 LCD-TVs and 80,000 PDP-TVs in 2004, and aims to ship 100,000 of each in 2005. In the United States market, the focus will be on 26-, 32-, 42-, and 50-inch models.
Teco has also moved into the mainland, where it will begin mass production of LCD-TVs at a plant in Wuxi, Jiangsu Province, in April 2005. The Taiwanese company recently began marketing its own-brand LCD-TVs in Shanghai, and is evaluating the feasibility of setting up a bigger LCD-TV plant in China.
A senior Teco official says that his company has begun shipping self-developed LCD-TVs to major export markets such as the U.S., Japan, and Europe. He reports that Teco has decided to set up LCD-TV plants in Slovakia and mainland China; the Slovak plant will start mass production in early 2005 with an annual capacity of 20,000 units in the initial stage, rising to between 40,000 and 50,000 units by the end of April.
Technological Edge
Frank Lee, vice president of Kolin, says that his company realizes the difficulty of competing with makers of traditional cathode-ray tube (CRT) TVs in mainland China, who enjoy much lower costs than Taiwanese companies. The island's manufacturers of LCD TV's, however, have a strong competitive edge over their mainland rivals thanks to their high level of quality and technology.
Kolin has moved to cut costs, Lee reports, by contracting with a Chinese assembler to produce Kolin-brand LCD-TVs for sale in eastern China, and will set up its own production facility there once an economic scale is achieved.
An industry analyst says that Taiwanese appliance makers are moving aggressively in mainland China with the aim of securing an early footing in the LCD-TV business there. They are drawn by optimistic expectations of the market in the mainland, where the annual volume of LCD-TV sales is expected to reach 10 to 20 million in the near future.
The manufacturers feel that they will be able to prosper in the mainland market only if they gain an early lead over big international brands (such as Sony, Sharp, Panasonic, LG, and Haier), which enjoy much greater brand awareness. While their prices do not provide much of a competitive edge, the Taiwanese producers hope to cut import tariff costs by cooperating with partners in target markets.
Another factor that is forcing the three Taiwanese companies to move offshore is a lack of support in Taiwan from upstream suppliers of thin film transistor-liquid crystal display (TFT-LCD) panels. Other domestic manufacturers, including the BenQ Corp. and Chi Mei Group, enjoy such support from their own affiliated upstream panel makers, the AU Optronics Corp. and Chi Mei Optoelectronics Corp., and intend to keep their production in Taiwan.
The analyst notes that Tatung, another leading appliance manufacturer in Taiwan, has been concentrating on the contract production of LCD-TVs for major international brands instead of developing its own brand.
The industry analyst says that LCD-TVs produced in mainland China are expected to be strongly cost competitive, and that the huge market on the other side of the Taiwan Strait will help the island's brands to achieve economies of scale at an early date. Therefore, he stresses, "Now is the best time to develop LCD-TV production and market in China. Wait too long, and there will be no chance to win out over the big international brands there." (Jan. 2005)
Caption: Taiwanese branded-product suppliers are jumping into the lucrative LCD-TV business.
Table:
Source: The companies.
Sampo, for instance, recently announced plans to move its global LCD and plasma display panel (PDP) production base to Kunshan, in mainland China's Jiangsu Province. The company also plans to cooperate with a partner in Mexico for the joint development of the American market.
The Kunshan plant will turn out products for the mainland market through Sampo's sales branches there. The firm's own-brand TVs may also be marketed in Europe, according to a company official. Talks are under way with a contract partner in Milan, Italy for the local assembly of Sampo-brand LCD-TVs for regional sales.
The official reports that the Sampo group exported about 50,000 LCD-TVs and 80,000 PDP-TVs in 2004, and aims to ship 100,000 of each in 2005. In the United States market, the focus will be on 26-, 32-, 42-, and 50-inch models.
Teco has also moved into the mainland, where it will begin mass production of LCD-TVs at a plant in Wuxi, Jiangsu Province, in April 2005. The Taiwanese company recently began marketing its own-brand LCD-TVs in Shanghai, and is evaluating the feasibility of setting up a bigger LCD-TV plant in China.
A senior Teco official says that his company has begun shipping self-developed LCD-TVs to major export markets such as the U.S., Japan, and Europe. He reports that Teco has decided to set up LCD-TV plants in Slovakia and mainland China; the Slovak plant will start mass production in early 2005 with an annual capacity of 20,000 units in the initial stage, rising to between 40,000 and 50,000 units by the end of April.
Technological Edge
Frank Lee, vice president of Kolin, says that his company realizes the difficulty of competing with makers of traditional cathode-ray tube (CRT) TVs in mainland China, who enjoy much lower costs than Taiwanese companies. The island's manufacturers of LCD TV's, however, have a strong competitive edge over their mainland rivals thanks to their high level of quality and technology.
Kolin has moved to cut costs, Lee reports, by contracting with a Chinese assembler to produce Kolin-brand LCD-TVs for sale in eastern China, and will set up its own production facility there once an economic scale is achieved.
An industry analyst says that Taiwanese appliance makers are moving aggressively in mainland China with the aim of securing an early footing in the LCD-TV business there. They are drawn by optimistic expectations of the market in the mainland, where the annual volume of LCD-TV sales is expected to reach 10 to 20 million in the near future.
The manufacturers feel that they will be able to prosper in the mainland market only if they gain an early lead over big international brands (such as Sony, Sharp, Panasonic, LG, and Haier), which enjoy much greater brand awareness. While their prices do not provide much of a competitive edge, the Taiwanese producers hope to cut import tariff costs by cooperating with partners in target markets.
Another factor that is forcing the three Taiwanese companies to move offshore is a lack of support in Taiwan from upstream suppliers of thin film transistor-liquid crystal display (TFT-LCD) panels. Other domestic manufacturers, including the BenQ Corp. and Chi Mei Group, enjoy such support from their own affiliated upstream panel makers, the AU Optronics Corp. and Chi Mei Optoelectronics Corp., and intend to keep their production in Taiwan.
The analyst notes that Tatung, another leading appliance manufacturer in Taiwan, has been concentrating on the contract production of LCD-TVs for major international brands instead of developing its own brand.
The industry analyst says that LCD-TVs produced in mainland China are expected to be strongly cost competitive, and that the huge market on the other side of the Taiwan Strait will help the island's brands to achieve economies of scale at an early date. Therefore, he stresses, "Now is the best time to develop LCD-TV production and market in China. Wait too long, and there will be no chance to win out over the big international brands there." (Jan. 2005)
Caption: Taiwanese branded-product suppliers are jumping into the lucrative LCD-TV business.
Table:
Makers?Overseas LCD TV Deployment | ||
| The group first set up motor plants in China
and Eastern Europe and continuously introduced air-conditioner compressors and LCD-TVs for production there. | ||
| With one LCD-TV production plant in Kunshan,
Jiangsu Province, China; and a assembly partner in Milan, Italy | ||
| Pushed LCD and PDP TVs in the U.S. and Europe;
targets China as its major market of LCD-TVs (currently with one assembly partner in China). | ||
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