BriView to Become World's No. 2 LCD TV Contract Assembler

Driven by increasing orders from major Japanese TV vendors, including Sony, Sharp, Toshiba and Panasonic, Taiwanese contract LCD TV assemblers are seeing rising revenues and profits.

BriView Technology Corp., an affiliate of the AUO Group, is expected to become the world's second-largest contract TV assembler this year, trailing TPV Technology Ltd. but outperforming major rival Hon Hai Precision Ind. Co. Ltd.

David Hsieh, vice president, NPD DisplaySearch Greater China, says that in Q2 all major Taiwanese contract TV assemblers benefited from  increasing orders from Japanese vendors, including TPV, BriView, Hon Hai, Compal Electronics Inc., Wistron Corp. etc., with some Japanese TV vendors' outsourcing ratio in Q2 reaching 70%.

Sony, Hsieh says, outsourced 71% of its TVs in Q2, much higher than an average of 60% in the past, to raise revenues of Taiwanese suppliers Hon Hai, TPV and BriView. Sony targets to ship about 12 million LCD TVs this year and is a top-five vendor globally in the segment.

Hsieh says H2 is the traditional peak for the global TV market, coupled with underselling to intensify in Q4, so dependence on Taiwanese contract suppliers is set to increase. The V.P. attributes BriView's increasing TV shipment volume to integrated supply chain between BriView and its parent AU Optronics Corp. (AUO), a major supplier of thin film transistor-liquid crystal display (TFT-LCD) panels in Taiwan. The vertically integrated chain is closely partnered with four major Japanese TV vendors, including Sony, Sharp, Toshiba and Panasonic. BriView has won orders from all the four Japanese brands and is expected to ship more than 10 million TV this year, outstripping Hon Hai's eight million units.

Hon Hai, however, is still the major contract TV assembler to Sony, with Compal being a major supplier to Toshiba. Sharp's outsourcing ratio is relatively lower, about 23% in Q2, and its major Taiwanese contract assemblers are AmTRAN Technology, Co. Ltd., TPV and Wistron, with AmTRAN being  the major supplier to Vizio of the U.S., and Grundig of Europe.

Hsieh Pei-fen, senior industry analyst at Market Intelligence & Consulting Institute (MIC) under Taiwan's Institute for Information Industry (III), says that thanks to rising demand from Europe and the U.S. for the year-end sales season, as well as big-volume demand from Mexican government's digital-TV tenders, Taiwanese LCD TV contract assemblers are expected to ship about 19.42 million LCD TVs in H2, 2014, up 14.4% from the first half.

The MIC analyst forecasts that Taiwan's LCD TV industry is expected to recover from the continued shipment decline in the past two years in 2014, thanks to slowing shipment decrease of Japanese TV vendors, as well as increased orders from new customers in Europe, the U.S. and China. In general, Hsieh forecasts that Taiwanese contract TV assemblers' total annual shipments to grow 4.6% to about 36.41 million units this year.

Threats & Strategy

Taiwanese companies are not the only contract suppliers to Japanese TV brands. Industry analysts say that Chinese contract assemblers are growing fast to gradually threaten Taiwanese players. They urge Taiwanese companies to cooperate more closely with panel suppliers, and set up overseas assembly plants in Europe and/or the U.S.

After Toshiba closed all its overseas TV assembly factories, says NPD DispalySearch V.P. Hsieh, the Japanese brand's outsourcing ratio has reached 85% in Q2, 2014. About 30% of Toshiba's TV sets are supplied by Compal, while BriView also supplies a big portion to the Japanese customer. However, Hsieh warns, some Japanese brands, including Toshiba, have begun ordering from Chinese  companies as Konka, SKYWORTH, TCL etc.

Major Taiwanese TV Contract Assemblers & Customers
Taiwanese Contract Assembler	2014 Shipments	Major Contract Customers
TPV	>15 million	AOC, Sony, Sharp, Philips
BriView	10 million	Sony, Toshiba, Sharp, Panasonic
Hon Hai	8 million	Sony, Vizio,
Wistron	5 million	Xiomi, Panasonic
Compal	5 million	Toshiba, Panasonic
AMTram	3 million	Vizio, Grundig, JVC