Samsung, LGE, Sony to account for half of 2015 display panels

DetailsJoseph O'Halloran | 03 March 2015

The panel-allocation dominance of the three leading TV makers Samsung, LGE and Sony will be more pronounced in 2015, putting more pressure on smaller rivals says research from IHS.

IHSAccording to the Quarterly LCD TV Value Chain & Insight Report the three CE giants grew their year-over-year shares of LCD TV shipments by an average of 11% in 2014, 4% higher than the market average. The top three TV brands also purchased more than a third (37%) of the total global TV panel supply in 2014, and the analyst expects this share to get larger, growing their LCD TV shipments 16%, year over year, to reach 110 million units or 42% of all TV panel shipments they want to secure from their suppliers in 2015.

"Based on very optimistic shipment targets, the panel-allocation dominance of these three companies -- and Samsung, in particular -- will be even more pronounced, which will put more competitive pressure on smaller competitors," explained Deborah Yang, display supply chain research director for IHS Technology. "The three leading TV manufacturers will, therefore, have greater influence over the global panel supply this year, causing panel makers to list them as first priority customers."

What makes this land grab more significant, the analyst also noted, was that in the LCD TV industry, the companies controlling panel allocations during a shortage generally garner the most market share. Companies that purchase panels at competitive prices during an over-supply can also save on costs, which helps raise profits. In addition the top three TV brands' influence over certain panel sizes will also likelyincrease this year.

"For Samsung, LGE, and Sony, it makes sense to obtain large allocations and make the market tighter, especially when they dominate purchasing and can influence panel allocations," Yang added. "Meanwhile, panel makers are encouraged to support them, because they must look for long-term winners, rather than just supporting smaller, niche players...For 48-inch, 49-inch and 58-inch sizes, in particular, the purchasing power of the three TV market leaders is very strong. As the largest companies' panel allocations become even bigger, smaller players could be forced to take a niche approach or be squeezed out entirely."