More TV Makers Are Outsourcing LCD Panel Production To OEM/ODM Firms

Ryan Bozeman

While the number of LCD TVs being produced globally is expected to drop over the course of the next few months, OEM (original equipment manufacturer) and ODM (original design manufacturer) companies are actually ramping up their production of LCD TV panels, according to data published by market research firm DisplaySearch. This rise in monthly OEM/ODM shipments from the end of 2010 all the way through to March 2011 indicates that more and more LCD TV brands are outsourcing the manufacturing of LCD panels fitted in their HDTV displays to these companies.

The MarketWise – LCD Industry Dynamics report released recently by DisplaySearch sought to investigate worldwide trends in LCD TVs and other display technologies that play a vital role in the television market. The report pointed out that TV manufacturers have adopted a cautious stance with their LCD TV inventories during the first quarter of this year, despite posting solid performances across the board for the fourth quarter of 2010. The uncertainty surrounding demand for flat-screen LCD televisions worldwide has forced TV brands even as large as Samsung and Sony to cut back on their LCD TV production levels.

In contrast, the top ten LCD OEM companies will be boosting their production in January 2011 by 4.3% over the previous month, bringing the total to more than 14 million units. Following the January spike, February and March will see a more moderate output of a touch over 12 million units each.

The growing trend of outsourcing LCD panel manufacturing to OEM and ODM companies shows that TV makers are seeking to better manage costs, scale up production, as well as broaden their access to LCD panel supplies. Not all TV brands are equally active in this subcontracting process – some are scaling back, but most are gearing up for more, and the proportion of LCD panels outsourced to OEM/ODM firms is expected to continue increasing for the foreseeable future.

Source: DisplaySearch