Pricing for large-screen TVs measuring 65 inches and up could start to drop in a big way in the near future as Asia-Pacific-based TV manufacturers continue to expand production capacity for large LCD panels.
On Thursday, China-based TV maker TCL said that it will build a Gen 11 LCD panel factory, the world’s largest, in Shenzhen, China to expand its supply of large-screen TVs measuring 65 inches and bigger.
The news followed the takeover of Japan’s Sharp last February by Taipei-based Foxconn, a major original design manufacturer. Sharp has significant assets in LCD panel production, including a large-screen Gen. 10 LCD panel plant. Sharp also produces heavy volumes of IGZO LCD panels used in mobile devices.
Other Asia-Pacific-based manufacturers, including China’s BOE Technology, have been expanding LCD panel production at a significant rate as well.
TCL said its subsidiary China Star (CSOT) will begin construction of its new $7.8 billion panel factory shortly.
Read more on TCL’s Gen 11 LCD Plant after the jump:
TCL is one of the world’s largest television manufacturers and has been aggressively growing its brand for TV marketing in the United States in recent years. Its lines of TCL Roku TVs have been particularly popular sellers in North America.
China Star Optoelectronics Technology (CSOT) is a leading TV panel supplier and a subsidiary of TCL Group. The new plant will produce extra-large high-resolution flat panel displays targeting 65- inch and- larger LCD TV markets. When complete, the new production line will surpass BOE’s Gen 10.5 LCD panel plant, which started construction in December 2015, in terms of generation of return on investment, TCL said.
TCL said the new production capability adds to TCL’s continued investment in making CSOT, which first began production in 2009, one of the world’s leading display panel producers. CSOT currently runs two Gen 8.5 lines which are tailored to primarily producing panels up to 55 inches in screen size. The new Gen 11 higher-generation production lines will offer greater efficiency for larger-size panels, TCL said.
TCL said it decided to make the investment to move up production in panel screen size after seeing a sustained over-supply situation of traditional panels “through competitors’ Gen 8.5 capabilities,” while at the same time, few suppliers had large-size production capabilities.
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“As TCL grows rapidly in the U.S., the expanded capabilities of CSOT are critical in helping us keep up with demand,” stated Chris Larson, TCL sales and marketing VP. “We already benefit from a vertically integrated supply chain that gives us cost advantages over our competitors, and this investment will allow us to take a leadership position in large size TVs.”
TCL said at the same time that sales of “traditional” screen-size displays are stalled or declining, demand continues to accelerate for large-size high resolution panels.
The global market has seen the mainstream TV size shifting, with demand for large-size TVs estimated to grow at an annual rate of more than 20 percent, according to TCL.
Currently, displays larger than 55 inches account for approximately 10 percent of the TV market, but that percentage of the overall mix is expected to grow significantly in coming years.
“The prospect of extra-large LCD panels is promising and large-size high-resolution TVs will soon be mainstream,” TCL said. “Upon completion, the Gen 11 panel fab will allow TCL to meet the needs of consumers in this emerging segment.”
By Greg Tarr
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