LED-TVs Drive China DTV Market to Brighter Days

Leading companies, however, struggle with profits.

In the first half of 2010, LED-backlit LCD-TVs gained significant popularity in the country as Chinese-based multinational electronics manufacturer Hisense as well as other worldwide OEMs introduced the new sets to the domestic market, according to China market research company iSuppli Corp.

Among the total shipments of leading companies, LED-TVs garnered 30 percent share during the first half of 2010 in China. iSuppli believes the market, driving the overall Chinese DTV space, will continue to expand until 2012 because of four reasons:

Continued home appliance sales to rural areas are expected. The Chinese government implemented a stimulus policy to familiarize consumers with the new sets, giving rebates to consumers that bought the devices.
More domestic panel lines are being built to reduce the price of panels, thus lowering the price of TVs in the domestic market.
The switch from analog to digital television before 2015, as well as the availability of high-definition content, will drive consumers to upgrade their current sets.
New technology and selling points launched in 2010, such as LED-TV, Web TV, Internet TV and others, will drive adoption of the technology.

Production Up But Domestic OEMs Struggle
As the technology develops further, LCD-TV production in China is forecasted to reach 63.9 million units by 2014.

For domestic OEMs, LCD-TV production in 2010 reached 21.0 million units in the first half, and is forecasted to hit 46.6 million units for all of 2010, an increase of 16 percent from 2009. Total production among domestic LCD-TV manufacturers in the first half amounted to 12.3 million units—translating into 58 percent market share out of the total 21.0 million units shipped.

In contrast, second- and third-tier TV OEMs performed better in the first half of 2010 than the larger companies, showing that small companies are having a greater influence on the market—something that should become even more obvious China in the next four years.

Taiwanese Chip Suppliers Still Dominate
Of the total 21.0 million LCD-TVs shipped in the first half of 2010. Taiwanese semiconductor suppliers such as Mstar Semiconductor, MediaTek and Realtek dominated the TV processor market, owning 92 percent market share.

While Mstar dominated the market from 2007 on, Realtek made greater progress in 2009 and 2010 with its high price/performance and enhanced network technology. In comparison, foreign companies like Trident, ST, Broadcom, Zoran and Micronas exited the TV processor market, lacking the flexibility to operate and adapt quickly in the shifting Chinese market.
Limited by a young ecosystem, and especially lacking a push from the government, China’s DTMB market was unsuccessful in the first half of 2010, as in 2009. Yet, this market is expected to ramp up and reach 9.3 million units by 2014, up from 4.1 million units expected to ship in 2010.