LED Empowers China's TV Industry, May Trigger Explosive Growth

China's TV industry is currently facing new opportunities brought by multiple technological transformations, including the popularization of digital TV, the promotion of triple-network integration, and the upgrade of flat-panel TVs. Since the vast majority of domestic brands do not master the core technology and patents of LED TVs, 2010 became a "disaster year." However, analysts believe that China's TV industry may experience explosive growth in 2011, with opportunities to enter a new golden decade in the future.

In 2008, with the outbreak of the global financial crisis, the Japanese consumer electronics industry was greatly affected, but it was actually good news for domestic color TVs. At that time, the supply of raw materials such as panels eased and prices fell, which greatly reduced the cost of domestic color TVs, enabling the domestic color TV industry to achieve profitability across the entire sector in 2009. However, the large amount of panels purchased in advance and the finished products produced created enormous inventory pressure, while foreign competitors such as Samsung made a strong comeback with significant price cuts, putting the domestic color TV industry under tremendous crisis. In 2010, with the combined outbreak of RMB appreciation, rising raw material prices, rising labor costs, and the lack of core components, China's color TV industry once again experienced collective losses.

In fact, the fundamental reason restricting the development of China's color TV industry is the lack of core technologies supporting industry development, especially LCD screen technology. Once Chinese enterprises lose the bargaining power over upstream components, the development of China's color TV industry will fall into a difficult situation.

　　The national level has also recognized this. In March last year, the "Electronic Information Industry Restructuring and Revitalization Plan" jointly announced by the National Development and Reform Commission and the Ministry of Industry and Information Technology, together with the new policies for the strategic transformation of the color TV industry, form part of the MIIT's 600-billion-yuan investment plan, of which over 100 billion yuan will be invested in new-type display core component fields such as high-generation LCD panels, plasma screens, and LEDs.

　　In November this year, the State Council issued the "Decision on Accelerating the Cultivation and Development of Strategic Emerging Industries." Referred to by the outside world as the new 4-trillion-yuan investment plan, this decision designates seven major emerging industries — including the energy conservation and environmental protection industry and the next-generation information technology industry — as the key investment priorities for the next step, and emphasizes the need to focus on developing core foundational industries such as integrated circuits, new-type displays, high-end software, and high-end servers within next-generation information technology.

　　In order to fundamentally change the situation in which upstream core components are subject to the control of others, color TV enterprises have begun their technological research and development efforts

　　Changhong invested in and launched China's first plasma screen production line in Mianyang, Sichuan, in 2007, and by early 2010 achieved an annual production capacity of 2.16 million pieces, making it the world's third-largest plasma panel production capacity. It also began establishing a joint venture with AUO for LCD modules and started laying out its presence in the next-generation display technology OLED.

　　In addition, Tsinghua Tongfang began introducing LED technology and conducting independent research and development in 2004, and successively acquired LED upstream enterprises in Singapore, Malaysia, and other locations. In October this year, Tsinghua Tongfang acquired 25% of the shares of Jingyuan Electronics, entering the upstream electronic components manufacturing field of the industry chain through this transaction, thereby mastering the core technologies and key patents of the LED industry. Furthermore, through the mass production successively achieved at the Shenyang LED backlight production base and the Beijing LED epitaxial wafer and chip base, together with the official groundbreaking of the first phase of Tsinghua Tongfang's LED semiconductor industry base in Nantong, Jiangsu, with a total investment of 3 billion yuan, it has become the first enterprise in China's color TV industry to master the key core technologies of the LED industry and possess a complete LED industry chain.

　　In 2006, TCL, Hisense, Skyworth, Konka and other mainstream color TV manufacturers established their own LCD module production lines through joint ventures and technical cooperation. Today, these companies' mastery of the flat-panel TV industry chain has increased from 20% to 60%.

　　Industry insiders believe that China's color TV industry faces unprecedented opportunities in 2011. The relatively complete industry chain is likely to make plasma the lifeline of China's color TV industry. LED TVs will also become a new powerful driving force. Currently, judging from Tsinghua Tongfang's investment in the TV industry, China's plasma and LCD TVs are being viewed favorably, and the technology industry, especially the home appliance industry, will be a major growth point in the future.

(Editor: zhouboone)