TV sales of Samsung Electronics and LG Electronics, the world’s largest and second-largest TV manufacturers, are key indicators for the global panel industry. However, since 2015, both television services have fallen into a downturn.
The deterioration of the performance of first-tier color TV assembly companies has a direct impact on the market economy. Although there is a certain lag in industrial influence, from the perspective of the sales of the world's major color TV manufacturers in the first three quarters, it is very difficult for the TV industry to quickly emerge from the predicament, so it may bring about a crisis of panel demand reduction and price fall.
burden
In Samsung Electronics, in the first quarter of 2015, due to the deteriorating sales of Samsung's TV products, the consumer electronics (CE) division of the company's color TV and Baiyin products had an operating deficit of 140 billion won. Although in the second quarter of 2015, the consumer electronics division of Samsung Electronics achieved operating profit of 210 billion won, the profit margin of color TV products still has a large discount compared with previous years, mainly due to the power of white goods such as refrigerators and washing machines.
The status of LG Electronics is also not very optimistic. In the first quarter and second quarter of 2015, the home entertainment department (HE) of LG TV had operating losses of 6.2 billion won and 82.7 billion won, respectively. However, the HE department of LG Electronics does not include white electricity and therefore is not comparable to Samsung CE. However, the two common characteristics are that the television business will impose a burden on its own departments.
The reasons for the unsatisfactory performance of several TV sets given by Samsung and LG are probably due to the fierce exchange rate, the declining sales of currencies in global emerging countries, and the downturn in the European economy. The overall market conditions for color TVs in the world are poor.
The industry believes that the panel's crisis lies in two big blocks, one is the Chinese market, although Samsung LG's sales volume in China's color TV market is much lower than the local brands, but the upstream panel companies rely on the shipment of Chinese manufacturers is second only to the two strong, one is In the emerging markets, the internationalization of China's color TV brands has only just begun. The international market is mainly dominated by manufacturers such as Korea and Sony, but the increase is large but the exchange rate losses are also large. This causes manufacturers to face choices, whether it is against the market share of loss-making expansion, or for the time being. Extinguishes and protects profits, this will affect the upstream panel industry.
Alert
For Chinese color TV brands that are accelerating their internationalization, the global exchange rate problems faced by Samsung TV and LG TV are also inevitable for future domestic brands.
In August 2015, the U.S. dollar index was around 95, while in October 2014, the U.S. dollar index was around 87, up about 9%. The U.S. dollar index is mainly compared with the euro, yen, pound sterling, Canadian dollar, Swedish kronor and Swiss franc. In addition, the dollar's average value indicator rose from 100 on March 31 last year to 100.31, the highest in 12 years.
Among them, the sharp devaluation of the currencies of Russia and Brazil in particular has the greatest impact on the performance deterioration of the two color TV sales giants. Since the sales of Samsung and LG TVs are mainly in the international market, the procurement of the major components of color TVs are all denominated in US dollars, but the terminal sales are based on the local currency denomination.
Obviously, the TVs made from upstream manufacturers purchasing panels and parts from the U.S. dollar this year were sold in the above-mentioned emerging markets in rubles or Brazilian reals, and the loss was not unexpected.
In the case of currency devaluation, color TV sales businesses can choose to increase the retail price in equal proportions, but in this way, the hard-laid market share may be seized by rivals. For example, in October last year, a TV with a price below $1,000 was sold in Russia at a price of about 43,000 roubles. If it is priced at a rate of 68,900 roubles this year, sales would shrink and market share shrink. If the finished product accumulates in the warehouse, it also causes inventory depletion and the chain reaction continues.
More crucially, in 2014, due to insufficient supply, the price of LCD panels was still much higher than in previous years. Therefore, compared with the same period of previous years, on the one hand, the price of the panel pushed up earlier, on the one hand, the strong US dollar pushed up later, and double squeezed the profits of color TV manufacturers.
accident?
Perhaps the industry is more concerned about the slump in the Chinese color TV market, but from a global perspective, the Chinese market is actually a stable consumer TV country. According to the data report of market research agency IHS Displaysearch, the total volume of world color TV shipments in the first half of 2015 was approximately 9,791,100 units, a decrease of 5% year-on-year from the 131 million units in the same period of 2014, and the total amount shipped in the first half of the year was 41.551 billion US dollars, up year-on-year. The $44.283 billion in the same period decreased by 6.1%.
According to the IHS data, the Chinese market is the only one in the world that is still growing. The color TV shipments and shipments in Eastern Europe and Africa declined by more than 20%, especially in Eastern Europe, including Russia, with a decrease of nearly 30%. Although South American sales of low-priced products increased, the decline in shipments was also Nearly 10%, the amount of shipments dropped by more than 20%.
An important reason for Samsung TV's second-quarter performance improvement is that the company has reduced TV sales in Eastern Europe and instead increased its investment in the better North American market, while LG TV has decreased its share in North America, resulting in a loss in the second quarter. expand.
Data show that in the first half of 2015, Samsung Electronics shipped approximately 1,833,800 color TV sets in Eastern Europe, down 36.5% year-on-year, and in North America, it increased by 2.6% to 4,484,500. In the first half of this year, LG Electronics' shipments of Eastern European color TVs decreased by 16.9% to 1,922,800 units, and decreased by 15.5% year-on-year in the North American market to 1.59 million units.
From this perspective, the intrinsic exchange rate factors make the color TV shipments in North America clearly have a direct impact on the performance of the world’s top two color TV giants.
The deterioration of the performance of first-tier color TV assembly companies has a direct impact on the market economy. Although there is a certain lag in industrial influence, from the perspective of the sales of the world's major color TV manufacturers in the first three quarters, it is very difficult for the TV industry to quickly emerge from the predicament, so it may bring about a crisis of panel demand reduction and price fall.
burden
In Samsung Electronics, in the first quarter of 2015, due to the deteriorating sales of Samsung's TV products, the consumer electronics (CE) division of the company's color TV and Baiyin products had an operating deficit of 140 billion won. Although in the second quarter of 2015, the consumer electronics division of Samsung Electronics achieved operating profit of 210 billion won, the profit margin of color TV products still has a large discount compared with previous years, mainly due to the power of white goods such as refrigerators and washing machines.
The status of LG Electronics is also not very optimistic. In the first quarter and second quarter of 2015, the home entertainment department (HE) of LG TV had operating losses of 6.2 billion won and 82.7 billion won, respectively. However, the HE department of LG Electronics does not include white electricity and therefore is not comparable to Samsung CE. However, the two common characteristics are that the television business will impose a burden on its own departments.
The reasons for the unsatisfactory performance of several TV sets given by Samsung and LG are probably due to the fierce exchange rate, the declining sales of currencies in global emerging countries, and the downturn in the European economy. The overall market conditions for color TVs in the world are poor.
The industry believes that the panel's crisis lies in two big blocks, one is the Chinese market, although Samsung LG's sales volume in China's color TV market is much lower than the local brands, but the upstream panel companies rely on the shipment of Chinese manufacturers is second only to the two strong, one is In the emerging markets, the internationalization of China's color TV brands has only just begun. The international market is mainly dominated by manufacturers such as Korea and Sony, but the increase is large but the exchange rate losses are also large. This causes manufacturers to face choices, whether it is against the market share of loss-making expansion, or for the time being. Extinguishes and protects profits, this will affect the upstream panel industry.
Alert
For Chinese color TV brands that are accelerating their internationalization, the global exchange rate problems faced by Samsung TV and LG TV are also inevitable for future domestic brands.
In August 2015, the U.S. dollar index was around 95, while in October 2014, the U.S. dollar index was around 87, up about 9%. The U.S. dollar index is mainly compared with the euro, yen, pound sterling, Canadian dollar, Swedish kronor and Swiss franc. In addition, the dollar's average value indicator rose from 100 on March 31 last year to 100.31, the highest in 12 years.
Among them, the sharp devaluation of the currencies of Russia and Brazil in particular has the greatest impact on the performance deterioration of the two color TV sales giants. Since the sales of Samsung and LG TVs are mainly in the international market, the procurement of the major components of color TVs are all denominated in US dollars, but the terminal sales are based on the local currency denomination.
Obviously, the TVs made from upstream manufacturers purchasing panels and parts from the U.S. dollar this year were sold in the above-mentioned emerging markets in rubles or Brazilian reals, and the loss was not unexpected.
In the case of currency devaluation, color TV sales businesses can choose to increase the retail price in equal proportions, but in this way, the hard-laid market share may be seized by rivals. For example, in October last year, a TV with a price below $1,000 was sold in Russia at a price of about 43,000 roubles. If it is priced at a rate of 68,900 roubles this year, sales would shrink and market share shrink. If the finished product accumulates in the warehouse, it also causes inventory depletion and the chain reaction continues.
More crucially, in 2014, due to insufficient supply, the price of LCD panels was still much higher than in previous years. Therefore, compared with the same period of previous years, on the one hand, the price of the panel pushed up earlier, on the one hand, the strong US dollar pushed up later, and double squeezed the profits of color TV manufacturers.
accident?
Perhaps the industry is more concerned about the slump in the Chinese color TV market, but from a global perspective, the Chinese market is actually a stable consumer TV country. According to the data report of market research agency IHS Displaysearch, the total volume of world color TV shipments in the first half of 2015 was approximately 9,791,100 units, a decrease of 5% year-on-year from the 131 million units in the same period of 2014, and the total amount shipped in the first half of the year was 41.551 billion US dollars, up year-on-year. The $44.283 billion in the same period decreased by 6.1%.
According to the IHS data, the Chinese market is the only one in the world that is still growing. The color TV shipments and shipments in Eastern Europe and Africa declined by more than 20%, especially in Eastern Europe, including Russia, with a decrease of nearly 30%. Although South American sales of low-priced products increased, the decline in shipments was also Nearly 10%, the amount of shipments dropped by more than 20%.
An important reason for Samsung TV's second-quarter performance improvement is that the company has reduced TV sales in Eastern Europe and instead increased its investment in the better North American market, while LG TV has decreased its share in North America, resulting in a loss in the second quarter. expand.
Data show that in the first half of 2015, Samsung Electronics shipped approximately 1,833,800 color TV sets in Eastern Europe, down 36.5% year-on-year, and in North America, it increased by 2.6% to 4,484,500. In the first half of this year, LG Electronics' shipments of Eastern European color TVs decreased by 16.9% to 1,922,800 units, and decreased by 15.5% year-on-year in the North American market to 1.59 million units.
From this perspective, the intrinsic exchange rate factors make the color TV shipments in North America clearly have a direct impact on the performance of the world’s top two color TV giants.