LG, Samsung Display feel heat from little-known Chinese LCD makers

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Employees work inside a LCD factory in Wuhan, Hubei province, May 8, 2013.
Credit: Reuters/China Daily

By Miyoung Kim

SEOUL | Mon Sep 16, 2013 5:46pm EDT

(Reuters) - Chinese flat screen makers, once dismissed as second-class players in the global LCD market, are drawing envious looks from big names such as LG Display Co Ltd and Samsung.

While the Korean giants were busy developing next-generation organic light emitting diode (OLED) TVs, little-known Chinese companies have started selling a type of display that are sharper than the standard LCD and cheaper than OLED.

Say hello to ultra high-definition (UHD) displays.

Until last year, the UHD market had been almost non-existent, with just 33,000 sets sold in the 200 million-unit LCD TV market. Since then, shipments have soared around 20-fold, thanks to China, data from research firm IHS shows.

Chinese consumers who want brighter and sharper images but can't afford OLED screens made by LG and Samsung Display, a unit of Samsung Electronics Co Ltd, are turning to UHD.

The risk for OLED is that UHD may become mainstream and the long-awaited cheaper OLEDs arrive too late to displace it, analysts say.

OLED's long-term potential is huge: ultra-high resolution, screens thin enough that they could conceivably be curved or even rolled up, and so on.

But its slow introduction into the market and austere prices have thrown open a window of opportunity for UHD makers, in this case Chinese companies like BOE Technology Group Co Ltd and TCL Corp's LCD unit CSOT.

In China, 55-inch UHD models sell for around $1,800. By contrast, an OLED TV of similar dimensions sold by Samsung Electronics costs around $10,000.

"(I) have to admit that we hadn't fully appreciated the potential of the UHD market," LG Display's Chief Executive Han Sang-beom said recently.

"We assumed it'll be too early for this type of display to take off, and thus didn't think much of having diverse UHD product line-ups, especially in the low end. But I think we are not late just yet and we are working hard to lead the market here."

As Korean display makers work on their response to this growing menace, Chinese UHD makers are enjoying the fattest margins in the industry.

Even cross-strait rivals Innolux Corp and AU Optronics Corp have joined in the fray, drawn by promises of big profits.

In the second quarter ended June, Shenzhen-listed BOE Technology reported an 8.9 percent operating profit margin, while China Star Optoelectronics Technology (CSOT), a unit of China's biggest TV maker TCL Corp, posted a 9.6 percent margin.

By comparison, Japanese flat-screen pioneer Sharp Corp reported a razor-thin 0.5 percent margin. LG Display, the world's No.1 LCD maker, posted a 5.6 percent margin.

Samsung Display, a unit of Samsung Electronics, had a margin of 13 percent, the biggest in the industry. But excluding its fledging OLED business, its LCD margin is between 3 and 7 percent, according to a Bernstein forecast.

DEJA VU?

Just as Korea overtook flat-screen pioneer Japan in the early 2000s, the surprise offensive by Chinese flat screen makers may be a taste of what's to come, analysts say.

Chinese UHD producers have steadily expanded their capacity. In terms of cost and technological know-how, UHD presents lower barriers to entry compared to OLED.

"The Chinese have done very well so far this year and their momentum is likely to continue at least for another year or so, as they have spotted the potential of this niche market well ahead of bigger rivals," said Nam Dae-jong, an analyst at Hana Daetoo Investment & Securities.

"They've got also strong captive customers - Chinese TV manufacturers and a booming China market. It will take quite a while for Samsung and LG, which made a strategic mistake by ignoring the potential of UHD, to overtake them," Nam said.

Jolted by the reality of a growing UHD market, Samsung Electronics unveiled a 110-inch UHD TV in January. Interestingly, the UHD displays were not made by Samsung Display, but were produced by Taiwan's AU Optronics.

"Even with some expansion of the Chinese panel suppliers we do expect Samsung and LG Display to stay dominant and continue production in LCD," said Sweta Dash, director at IHS.

While Samsung and LG Display are investing billions of dollars in OLED this year, the two giants are also broadening their product lineups to include more popular 50 to 60-inch UHD models.

BOE Technology is now planning to raise 46 billion yuan ($7.5 billion) in the biggest Chinese equity offering this year, to build panel production lines and increase its stake in its LCD venture BOE Display Technology.

($1 = 1093.8000 Korean won)

(Additional reporting by Harro Ten Walde in BERLIN; Editing by Ryan Woo)

LG, Samsung Display feel heat from little-known Chinese LCD makers | Reuters

 

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Haier Releases UHD TVs at Half the Domestic Price in Korea Next Year

17 SEPTEMBER 2013

Haier, China’s biggest electronics company（Wrong。Haier is probably China‘s biggest home appliances company）, will enforce its marketing in Korea by releasing an ultra-high definition (UHD) TV in the domestic market next year.

Haier Korea Representative Kim Byung-yeol said in his recent interview with a reporter, “UHD TVs are in preparation to be released in the market by next year,” and added, “The headquarters is reviewing when to release which product at what time.”

UHD TVs are spreading quickly in the market as the next-generation televisions with a definition 4 times higher than full HD TV.

In Korea, Samsung Electronics and LG Electronics have each released 65 in. and 55 in. UHD TV models. Haier will compete against these companies by releasing a similar quality UHD TV, but at a lower price to aim for the next-generation TV market.

Haier is selling 65 in., 58 in., and 50 in. UHD TVs in the Chinese market. The 65 in. model is about 4 million won (US$3,681.88), which is 50% cheaper than Samsung’s same size UHD TV sold at 8.9 million won (US$8,192.19).

Haier’s domestic UHD TV release will allow the company to compete with both Samsung Electronics and LG Electronics in affordability. If Japanese companies such as Sony and Panasonic jump into the Korean UHD TV market, the competition will become even fiercer.

- See more at: Low-priced Chinese Electronics: Haier Releases UHD TVs at Half the Domestic Price in Korea Next Year | BusinessKorea

 

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China set to lead ultraHD in demand and supply

Sep. 6, 2013

Philip Hunter

The headlines at Europe’s biggest consumer electronics show, the IFA in Berlin, were hogged by big screens and new technologies from well-known brands like Samsung and Sony, but in the case of ultraHD (UHD) the driving forces are coming increasingly from China. Although forecasts from NPD DisplaySearch and other market research groups are suggesting that China will be the world’s biggest market for 4K TVs in 2016, when UHD may be taking off, the country’s TV manufacturers are already disrupting the market by bringing out models several times cheaper than Samsung, Sony, LG, and other established players.

These displays are already becoming available in Europe and North America, with Chinese TV maker TCL in July 2013 announcing the first 50in. 4K screen to be released in the U.S. for less than $1000, the 7E504D at $999. Other Chinese makers — such as Haier, Konka and Changhong Electric — are likely to follow suit, throwing down the gauntlet to non-Chinese competitors, whose 4K displays typically weigh in at around $5000, or substantially more for bigger displays. A number of pay-TV operators, such as Viasat in the Nordics, are now betting on this arrival of lower-price displays stimulating the UHD field and accelerating developments right across the ecosystem.

At the same time, though, 4K technology is still at a nascent stage, with manufacturers still experimenting not just with different resolutions, frame rates and screen sizes, but also with the display technology. This was clear at IFA in Berlin, where one of the highlights was a prototype 4K UltraHD OLED TV from Samsung, following in the footsteps of Sony, which showed a similar laboratory model at CES in Las Vegas last January. Unlike LCD, OLED (organic light-emitting diode) uses an organic material to emit light in response to an electric current. Their big advantage is that they operate without a backlight. This means they can display true deep black and generally sharper colors, especially at low ambient light levels, while also being thinner and lighter in weight. There has been a growing belief that OLED is almost a substitute for high resolution, achieving a comparable viewing experience with a smaller number of pixels for a given screen size. But for very large screens resolution would still be a handicap, so the combination of OLED and 4K could deliver the ultimate picture quality.

Currently, however, the largest OLED displays anywhere close to commercial reality are 55in models from Samsung and LG. Inevitably, though, these two vendors and others were busy flexing their muscles at IFA with much larger 4K screens based on conventional LCD technology. Samsung took the lead here with a 110in. 4K UltraHD display, along with a 98in successor to its current 85in S9 Series 4K UltraHD TV. Even the S9 costs $40,000, so the 100in model is not likely to become a commodity anytime soon.

There were also a number of curved TVs on view at IFA, aping the curved screens in many cinemas so that the viewer is the same distance from all parts of the picture. The problem for curved TVs is that they only work well if the viewer is facing the mid line of the TV, and that is not possible for more than one person.

China set to lead ultraHD in demand and supply | HDTV content from Broadcast Engineering