Meko Press Releases

Flat Panel TV Assembly in Europe - Over-capacity Expected

DATE: 22^nd November 2006
- New Investment in Turkey by Chinese TV Maker Shows Importance of Meko Report -

Meko, the leader in European display market research, has revealed that a planned EUR100m investment in Turkey by Chinese TV set maker Konka will take capacity of flat panel TV sets in Europe past the 40 million sets per annum mark within the next three years.

The findings of the latest DisplayCast Special Report on Flat Panel TV Assembly in Europe, which covers plasma and LCD TV making, suggest that while there are still opportunities for European companies to benefit from investment in local TV assembly, there is a danger of over-capacity as the big TV set makers fight for market share in a rapidly consolidating market.

The research also highlights a change in the trend for vertical integration in TV set making, with the IT business model, using a combination of reference designs and off the shelf panels and assembled by third party EMS companies, not causing the disruption that was previously expected. New brands created using this model in the US have failed to replicate that success in Europe.

The report shows that the power of the major brands has increased with the switch to flat panels and the top ten LCD TV brands now have 90% of the region's sales volume.

Even more surprising is that the long term trend to outsource TV making, particularly to Turkey, has faltered and reversed and it now looks as though a very large share of the market for flat panel TVs in Europe will be supplied by the Korean and Japanese brands and panel suppliers.

The data indicates that there should be a number of good opportunities for European companies in the supply chain of both the panel business and the TV set business as nine of the top ten brands in the European flat panel TV market have announced plans and investments in the Central European region.

"At the end of this fascinating study, we can see that this centre of gravity for the TV set business is moving to the countries that are ‘just to the East of Germany’", notes Bob Raikes, Meko's MD and co-author of the report. "However, we expect to see Turkey fighting back with new business models, new branding strategies and new investments along with partnerships in the panel-making side of the business", he added.

There is one final warning in the findings of the report. "Looking at the plans from all the assemblers and brands, it looks as though there might be capacity for as many as forty million flat panel TVs by 2008", said Andrew Naylor-Higgins, Meko's special reports research manager and lead author of the report. "Half of that capacity could come from LG and Konka alone on current plans. It looks unlikely, on this basis, that there will be any shortage of capacity going forward as we only forecast around 33 million flat panel set sales by then", he says and concludes, "On the contrary, it seems likely that there may be some over-capacity and this will put huge pressure on the smaller players".

- ends -

Notes to editors: The report contains data on the following companies: A-Novo, Acer, Akai, Alba, Amtran, AOC, AUO, Bang and Olufsen, Beko, BenQ, BOE-Hydis, Bush, Changhong, Chi Mei (CMO), Chungwha, Compal, Conrac, Daewoo, Dell, Delta, DiBoss, Dicon, Digital Device, Digitest, FIC, Flextronics, Foxconn, Fujitsu, Fujitsu Siemens, Funai, Goodmans, Grundig, Haier, Hannspree, Hannstar, Hantarex, Hisense, Hitachi, HKC, HuiPu, Humax, Hyundai, Hyundai IT, Imper, Indtek, Ingram Micro, Inventec, IPS Alpha, Jabil, Jean, JVC, Keymat, Kolin, Konka, LG, LG.Philips, LiteOn, Loewe, Matsushita, McPerson, Medion, Meridian, Metz, Mivar, NEC, Neovia, Nexgen, Olidata, Orion, Panasonic, PGE, Philips, Phocus, Pioneer, Profilo-Telra, Proview, Quanta, Relisys, Sambers, Sampo, Samsung, Samsung LCD , Samsung SDI, Sanyo, SED Inc, Sharp, Shov, Sony, SVA NEC, Targa, Tatung, TCL, Teco, TEDM, Time, Toshiba, TPV, TTE, Thomson, UMC, Vestel, Videocon, Videoton, Viewsonic and Wistron, and is the most comprehensive and up to date available on this subject.

For more information on the DisplayCast Special Report on Flat Panel TV Assembly in Europe, please contact Andrew Naylor-Higgins by email at andrewnh@meko.co.uk or by phone on +44 (0)1369 830189.

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