The rapid development of China’s unknown LCD manufacturers makes Samsung under pressure
According to the Reuters’ reported on September 18, Chinese flat-panel display manufacturers, once were considered as the second-class participants of global LCD market, now makes the industry’s great manufacturers such as Samsung and LG display envy. When South Korea giants were busily developing a new generation of organic light emitting diode (OLED) TV, little-known Chinese companies have started selling another display, it is clearer than the standard LCD, cheaper than OLED, which is Ultra HD (UHD) display.
Data research firm IHS said UHD market barely exist before 2012, only about 33000 UHD TVs were sold among the total sales of 200 million LCD TVs. But ever since then, UHD TV shipments soared about 20 times, and it thanks to China. People all like to assemble UHD display screen with mouse and keyboard to play games. Chinese consumers who want bright and clear images, but can't afford to buy the OLED screen manufactured by LG and Samsung are considering buying UHD.
In the long run, OLED has huge potential, high resolution, enough thin screen, can also bend, all these advantages make it has strong competitiveness. But if consider from the price, we still have some difficulties to let OLED enter the Chinese market. In China, 55 inch UHD model sells about $1800.But by contrast, the sales price of the same size of OLED TV that Samsung electronics sales is about $10000. Including Samsung’s CCTV products, its price is always higher than other ordinary brands.
By comparing to the growing threat of South Korea display manufacturers, Chinese UHD manufacturers are enjoying the most lucrative profit margins in the industry. By the second quarter of this year, Beijing Oriental technology had achieved 8.9% operating profit margins, and China star photoelectric technology (CSOT), an agency of China's largest TV maker, TCL Company, also reported a 9.6% profit margin. By contrast, Japan's panel pioneer enterprise, Sharp only faint the profit margin of 0.5%. And the world's first LCD maker LG display also released the profit margin of 5.6%.
As South Korea beyond the panel pioneer Japan before, at the beginning of the 21st century, China's market develops rapidly. Securities investment analyst Nam Dae jong said that China is doing very well, so far this year, their momentum probably will last for at least about one year, they have discovered the potential of this market, as well as larger rivals. Nam said, "Samsung and LG made a strategic error decision that they ignore the UHD potential market, and focus on mobile phone manufactures and notebook research, so they will need quite a long time to catch up".