LED TV price cuts to promote local companies to enter the upstream (Figure)

In 2009, it was called “LED Year of the Year” by the LCD TV industry. Although it is expensive and lacks in functions, LED TV has begun to enter the consumer family. In the past, the New Year's Day holiday, LED TV is more self-depreciating, and some products have even dropped by 30%. Experts predict that with the further decline in the price of LED backlight modules, LED TVs will accelerate the replacement of ordinary LCD products. In order to win the initiative of the competition, local enterprises have actively deployed in the industrial chain.


Backlight module prices continue to fall


In the first half of 2009, with the sharp adjustment of the price of LED backlight modules, Korean companies such as Samsung and LG took the lead in launching LED TVs in the Chinese market. By September 2009, local brands such as Skyworth and Hisense also scaled up. Launched an LED TV. Since the third quarter of last year, various color TV companies have launched more than 80 LED TVs, accounting for about one-third of the number of new products in the same period.


In the past, the price of the yuan was tens of thousands of LED TVs. During the New Year's Day, the price cuts were raised. In Dazhong Electric, the current price of a new 46-inch plasma TV is 9,000 yuan. In the past year, the average price of this size product was around 16,000 yuan. Gome said that the overall decline of LED TVs exceeded 30%. In Suning, the 42-inch Blu-ray LED TV fell below 5,500 yuan.


According to the latest data from the research firm Displaysearch, in 2008, the global LED backlight module occupancy rate was only 6.7%, and in 2009 it has risen to 27.8%. By 2011, it will surpass the traditional CCFL backlight module for the first time, and increase the occupancy rate to 56%.


The main reason for the rapid increase in the occupancy rate of LED backlight modules is that the price drop is greater than the price reduction of CCFL. Xie Qinyi, vice president of Displaysearch Greater China, said: "By the first quarter of 2010, the price difference between the 40-inch LED backlight module and the same size CCFL module will drop from $140 in the third quarter of 2009 to $100. By the end of 2010, the spread between the two will drop to less than $40."


According to Displaysearch, as the price of LED backlight modules declines, the price difference between LED TVs and ordinary LCD TVs will further narrow.


In addition, Zibo, director of the National Semiconductor Lighting Engineering R&D and Industry Alliance Office, told reporters that in the next two or three years, a number of core patents in the LED field will expire in the 1990s. Accordingly, one can also expect a drop in LED costs.


According to the general rule of the consumer electronics industry, when the price of alternative products reaches 1.3-1.5 times the price of the substitute products, the former will enter a period of rapid growth, which is the main reason why many color TV giants have begun to launch LED TVs on a large scale:


Local companies have entered the upstream


It is worth noting that at present, local color TV companies still mainly participate in the competition by purchasing LED backlight modules, and the low price is the main way for domestic very colorful electric companies to seize the market. In the fierce market competition, local companies lacking LED backlight module control are obviously passive.


The reporter learned that only Japan Nichia, Toyota Synthetic, Cree, Germany Osram Opto Semiconductors and Philips Lumens have mastered the complete industrial chain of the LED industry, while South Korea’s Samsung and LG have mastered the world. More than 90% of the LED TV market, Ruiyi, Tongbao, Zhongqiang, etc. from Taiwan, China are the major manufacturers of LED LCD backlight modules.


In China, although Skyworth, Hisense, and BOE have developed LED backlight modules, their upstream LED packages need to be purchased from the world's top five LED chip suppliers such as Japan's Nichia.


It is reported that the industry chain profit obtained by LED application and packaging accounts for only 30%, while more than 70% of the profits are controlled by Japanese and American manufacturers who master high-power LED chips, epitaxial wafers and substrate material core technologies. Obviously, in order to truly master the leading role of the LED TV market, Chinese color TV enterprises must enter the upstream.


Zhang Xuebin, Chairman and President of Skyworth Group, said: “The United Nations Climate Change Conference in Copenhagen has made energy conservation and emission reduction a major part of economic development. In the color TV industry, the most realistic way to achieve energy conservation goals is to promote LED technology. Local color TV companies should also make breakthroughs in this area."


It is understood that as early as a few years ago, local enterprises have begun to infiltrate upstream and lay out module production. In 2005, Hisense established the LED backlight R&D team, which is the first company in the field to enter the field. In 2007, the Hisense LED backlight module project received key support from the National 863 Program. In 2008, Hisense completed the production of the first LED LCD module production line in China, and launched the first self-developed 42-inch ultra-thin LED TV in China.


Dong Fangzhong / photo

In addition to continuing to expand the proportion of LED TVs, Skyworth's 2010 LED backlight module shipments are expected to exceed 1 million. Zhang Xuebin said recently that Skyworth will actively participate in LED lighting applications and even intervene in the field of LED upstream chip packaging. Just like Skyworth plans to open up the LCD TV industry chain by participating in the LGD 8.5 generation LCD panel production line in Guangzhou, Skyworth will also complete the integration of upstream and downstream of the industry chain through cooperation and other means in the LED field.


Not long ago, Konka invested RMB 900 million in the liquid crystal module factory, and its module production capacity can reach 7.2 million pieces per year. The whole machine capacity can reach 3.6 million units per year. Chen Yuehua, president of Konka Group, said that the Kunshan module factory, which is wholly-owned by Konka, will be mainly used for R&D and production of LED backlight modules.


This year will be the year of LED TV sales


It is understood that less than 3% of TVs currently use LED backlights, and China's "Semiconductor Lighting Energy Conservation Industry Development Opinions" pointed out that by 2015, the market penetration of functional lighting, LCD backlights, landscape decoration and other LED products will be Reached 20%, 50% and 70% respectively. The market prospects for LED TVs are evident.


According to LEDinside research data, Samsung, LG and other manufacturers currently announced that the LED TV sales target for 2010 is close to 14 million units. Together with Japanese and Chinese local brands, the total sales volume is expected to be 15 million units, more than five times that of 2009. The recent survey of LED TV consumer subjective evaluation data by the China Electronics Chamber of Commerce Consumer Electronics Survey Office shows that 25% of consumers who are planning to buy flat-panel TVs in large cities tend to buy LED TVs.


"This year will be a year of LED TV sales, which will become an important feature of the color TV industry this year." Yu Weixing, general manager of Aowei Consulting, believes that with the increase in the number of LED TVs, the realization of large-scale production, raw materials, production costs, etc. It is expected to further reduce, the overall price is expected to continue to fall. "It’s like when the ordinary LCD TV just came out, it’s tens of thousands of yuan. Now it has dropped to the civilian price and entered the homes of ordinary people."


Ma Min, Director of the Quality Division of the Science and Technology Department of the Ministry of Industry and Information Technology, said that the state strongly encourages enterprises to improve the comprehensive competitiveness of their products through technological innovation and product innovation. The LED industry is in the ascendant stage of development, and there are currently about 18 million flat-panel TVs in the Chinese market.


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