It looks like another difficult year ahead for TV set sales, and that’s not likely to be good for big price promotions as the year wears on, according to a market research report just out from TrendForce.
The firm has revised down its full year global TV shipment forecast from 215 million units (revised down earlier this month} to 212 million, which would mean just 1% growth from last year’s 210 million units, if that level holds up.
This is due to a host of factors including the Ukraine War, a resurgence of COVID-19 in parts of China and other global regions and the impacted economy overall.
The changing market dynamics has also forced Samsung Electronics to delay the launch of White OLED TVs, that are to use panels procured from LG Display, TrendForce noted. This is expected to contribute to disrupting previous growth forecasts for 2022 OLED TV shipment performance, according to the research firm.
As a result, global OLED TV shipment growth has been revised down, with total shipments of 7.79 million units expected this year. That would mean an annual growth rate of 17%.
For global TVs overall, the TrendForce Q1-2022 market outlook indicates global shipments of TVs in Q1-2022 will be down 20% quarter on quarter to 47.26 million units, due primarily to the Ukraine war but also to the continued impact of high raw material prices, on-going issues with delivery logistics and China’s zero-COVID policy in Shang-hi.
Meanwhile, continued high inflation rates are forcing consumers with limited disposable income to cut back on non-essentials, with TVs among the categories to suffer most.
“Looking at the three major TV sales regions of North America, Europe and China in [Q1-2022], high inflation in Europe and the United States has led to a sharp 20% drop in demand,” TrendForce reported.
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TrendForce also observed that Q3 is when brands traditionally stock up for Black Friday and Christmas season promotions in Europe and the United States. However, this year’s FIFA World Cup was postponed to November, resulting in overlapping promotional schedules, which may curb sales.
Looking to the second half of 2022, TrendForce said the fact that ocean freight remains expensive this year, means additional costs will be increasing, especially for larger sized items, like very big screen TVs.
This is “not conducive to the rollout of branded manufacturers’ large-scale promotional activities in [second half 2022]. Therefore, TrendForce estimates that this year’s TV shipments will drop further to 212 million units, for an annual growth of only 1%, and there exists additional potential for downward risk.”
TrendForce said it is now expecting TV demand in Europe and U.S. to miss earlier estimates as international brands drop orders, and Q2-2022 shipments decline as TV panel prices rise.
“The top two leading TV brands, Samsung and LG Electronics, are mainly sold in North America and Europe. Therefore, since TV sales in Europe and the United States declined by 20% in [Q1-2022], this had the greatest impact on these two leading brands,” TrendForce observed.
The research firm said Samsung Electronics shipped 10.9 million TVs in [Q1-2022], down 3.1% quarter-on-quarter while LG Electronics shipped 6.53 million TVs in [Q1-2022], down 11.8% quarter one quarter and down 6.4% year over year.
TrendForce said the two S. Korean brands revised their panel purchase orders in late March, and Samsung’s purchasing volume in Q1-2022 was revised down 7.5%, falling 9.5% in 2Q22.
At the same time, LG Electronics primarily focused on reducing purchase orders in Q2-2022 and purchasing volume decline is expected to exceed 20%, the firm said.
TrendForce added that other major international manufacturers have recently revised their orders in succession.
“Although Chinese brands have yet to see a significant reduction in orders, if 618 promotions are disappointing, it cannot be ruled out panel procurements will begin to fall in mid-to-late Q2,” TrendForce stated. “Although branded manufacturers significantly revised TV panel orders downward in [Q2-2022], panel manufacturers have not seen a significant reduction in utilization rate, which will depress the price of panels below 55 inches (inclusive) in a sustained freefall while the prices of large size panels above 65 inches (inclusive) will continue to deteriorate.”
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By Greg Tarr
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