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TV Sales Could Be Down 30% in Q120
March 15, 2020
TV industry estimations are that the effects of the COVID-19 virus have reduced production by ~30% in February and March and production will not see a return to ‘normal’ levels until the end of May. The reductions in April will be ~20% - 25% and ~15% in May. Most TV set makers have not lowered their full year shipment goals, but those same producers were expecting to see production resume full levels in April just a short time ago, and now expect that to be pushed out further into June. It is optimistic to expect that shipments and sales lost during much of 1H will be made up in 2H, especially as TV panel prices continue to rise, building higher costs into new inventory. Xiaomi, now the 6th largest TV producer worldwide has decided to reduce set levels by 20% in March and between 10% and 15% in April, but has yet to change its full year shipment goals, citing deeper penetration into India and Southeast Asia this year and its first entry into the US market in 4Q. Retailers in the US have yet to see much change in supply levels (Wal-Mart (WMT) says no disruptions yet but possibly by April), but the US has only recently seen the virus spread and sets they have in inventory were likely produced and shipped before the virus limited production in China.
Samsung’s TV set production for Chinese customers is based in Tianjin where the infection has not produced a new case since February 23rd, and has most of its worldwide production (assembly) in Mexico (7 cases), Hungary (7 cases), and the Czech Republic (26 cases), giving them some insulation from the outbreak at the assembly level. The problem for Samsung will be at home, as Samsung Display still produces ~30% of the panels used by its parent and SE has relied on Chinese panel producers for another 35%. China is already formulating plans to stimulate TV sales as internal travel restrictions begin to be lifted, but the rest of the world is still in the early stages and has far more pressing matters on hand than goosing TV set sales. All in it will be a difficult year for the TV set business both a result of the virus on production and demand and the secondary effect of higher TV panel prices, which are the most costly component of TV sets.
TV Sales Could Be Down 30% in Q120
March 15, 2020
TV industry estimations are that the effects of the COVID-19 virus have reduced production by ~30% in February and March and production will not see a return to ‘normal’ levels until the end of May. The reductions in April will be ~20% - 25% and ~15% in May. Most TV set makers have not lowered their full year shipment goals, but those same producers were expecting to see production resume full levels in April just a short time ago, and now expect that to be pushed out further into June. It is optimistic to expect that shipments and sales lost during much of 1H will be made up in 2H, especially as TV panel prices continue to rise, building higher costs into new inventory. Xiaomi, now the 6th largest TV producer worldwide has decided to reduce set levels by 20% in March and between 10% and 15% in April, but has yet to change its full year shipment goals, citing deeper penetration into India and Southeast Asia this year and its first entry into the US market in 4Q. Retailers in the US have yet to see much change in supply levels (Wal-Mart (WMT) says no disruptions yet but possibly by April), but the US has only recently seen the virus spread and sets they have in inventory were likely produced and shipped before the virus limited production in China.
Samsung’s TV set production for Chinese customers is based in Tianjin where the infection has not produced a new case since February 23rd, and has most of its worldwide production (assembly) in Mexico (7 cases), Hungary (7 cases), and the Czech Republic (26 cases), giving them some insulation from the outbreak at the assembly level. The problem for Samsung will be at home, as Samsung Display still produces ~30% of the panels used by its parent and SE has relied on Chinese panel producers for another 35%. China is already formulating plans to stimulate TV sales as internal travel restrictions begin to be lifted, but the rest of the world is still in the early stages and has far more pressing matters on hand than goosing TV set sales. All in it will be a difficult year for the TV set business both a result of the virus on production and demand and the secondary effect of higher TV panel prices, which are the most costly component of TV sets.
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