Chi Mei to Speed Building Supply Chain in Southern China
28 April 2008
Chi Mei Optoelectronics Corp, a Taiwan-based leading manufacturer of TFT-LCD (thin film transistor-liquid crystal display) flat panels, is speeding up the building of a solid supply chain in Southern China by offering standardized LCD panels to second-tier manufacturers, aiming to counter intense competition from first-tier manufacturers.
Southern China currently devours as many as 35 million units of conventional CRT (cathode ray tube) TVs per year. As CRT TVs are gradually replaced by LCD TVs, second-tier manufacturers of conventional TVs are eager to shift to producing LCD TVs.
Chi Mei said it sold 1.2 million LCD TVs in southern China last year and the volume will jump to 3.6 million this year. Based on such sales, Chi Mei has a 65 percent market share in the 26-inch LCD panels market in southern China last year. But its rivals, including Samsung and LG of South Korea, are adopting the same marketing strategy as Chi Mei to penetrate the southern China LCD TV market.
To help second-tier manufacturers evade competition from the first-tier firms, Chi Mei has streamlined design processes to minimize production costs for assembled LCD TVs as well as revamping panel designs. Such tactic will enable second-tier manufacturers to use their advantage of well-established distribution channels to compete against first-tier producers with established house brands.
Thanks to the building of low-cost LCD TVs by Chi Mei, second-tier manufacturers in southern China have successfully tapped European and Russian markets.
Over the past several years, southern China has been the production center for 21-inch CRT TVs, with estimates crediting the manufacturers in southern China supplying about half of the global CRT market, which can consume 70 million CRTs TVs per year.
Chi Mei said it currently has a 65 percent market share in the 26-inch LCD TV market globally. After having built 26-inch LCD TVs, Chi Mei will step up developing 21.6-inch LCD flat panels, hoping to secure over 60% market share globally this year, with 21.6-inch LCD TVs targeted to replace conventional CRT TVs.
