Samsung LCD big order 'Hongjiajun' Sharp, Innolux or all-inclusive

South Korea’s Samsung plans to stop LCD panel production at the end of this year, but Samsung’s own-brand TVs and flat-panel products still have strong demand for LCDs. The market is concerned about who will supply the vacancies caused by the suspension.

According to DigiTimes a few days ago, Samsung chose to settle with Sharp. In the second half of the year, it will order 3 million TV panels to Sharp. The types of panels supplied include TN, VA, IPS and other panels.

As early as many years ago, Sharp has always been a provider of Samsung panels. Many of Samsung’s TVs use Sharp panels, but then Foxconn became the owner of Sharp. Sharp after the acquisition was considered from the company’s strategy , In 2017, terminated the continued supply of display panels to Samsung.

According to the Economic Daily report, Samsung’s LCD orders are all handed over to Sharp and Innolux. This is also the first large-scale order for a Samsung brand from a Taiwan-funded panel factory.

It is worth mentioning that both Sharp and Innolux belong to the 'Hong Family Army' line. If these two panel makers swallow all Samsung orders, the global TV and display panel market may be reshuffled by then.

In this regard, the relevant manufacturers are unwilling to respond positively.

Samsung occupies an important position in the global TV and flat-panel market, with huge LCD orders. Among them, the annual TV shipments are about 40 million units, and the market share is nearly 20%. As of last year, it has been in the market for 14 consecutive years. The world's largest TV manufacturers, most of which are TVs equipped with LCD panels; in terms of flat panels, Samsung is the world's second largest brand, second only to Apple, with a market share of more than 15%.

In the past, Samsung manufactured LCD panels in large quantities. In addition to supplying its own brand products such as TVs and flat panels, it also sold LCD panels to other brand factories to produce consumer products such as TVs.

In recent years, Samsung has considered the overall layout of the group. It started the LCD market retreat last year. It was originally expected to withdraw before the end of 2021. However, it has recently announced that it will stop production of LCD panels in advance until the end of the year. It has switched to focusing on QD quantum dot panels, LCD for Samsung and other high-end panel layouts.

Today, Samsung is unable to provide LCD panels for its own-brand consumer products. Instead, it purchases from Hon Hai Group related panel manufacturers Innolux and Sharp, which will help increase revenue and market share. For Innolux, the performance is greatly supplemented; and Sharp, who was not in the top six in the ranking, is expected to take this opportunity to enter the global leading lineup, and Hon Hai Group's panel power will further rise.

Although Innolux’s recent operations have encountered headwinds and suffered a huge loss of more than NT$17.4 billion last year, Hong Jinyang, the chairman of Innolux, has actively sought ways to break through after taking office. He has declared three major strategic goals in the short, medium and long term. Innolux won this wave of panel industry knockouts; Sharp has recently been actively expanding its power through mergers and acquisitions.

In addition, the 'Hon Hai series' is not only the revenue of the single-panel plant, but the component manufacturer Guangyu of Hon Hai also cleverly plays the role of linking various resources to attract the attention of the market. This time Samsung placed an order for the Hongjiajun panel factory, which also made Guangyu's follow-up order status and camp movement more attention.

Guangyu’s products are PCBs, connectors and wires. Among them, PCBs are mainly related to photoelectric boards and game consoles, while connectors and connection lines are mainly related to computer peripheral power cords.

After the Hon Hai Group became the owner of Sharp, Guangyu Divide Components became Sharp’s supplier, and also began to sell Innolux panels and Sharp’s panels, optical components, etc., among which PCB accounts for about 30% of revenue; EMS and Cable components and other products accounted for about 40% of revenue; Xiapu's Innolux panels and optical components accounted for about 30% of revenue.

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