Market Insight

[Display Dynamics] Innolux is gearing up TV set business

November 06, 2017

Linda Lin Linda Lin Principal Analyst, Display Outlook

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Key findings

  • Leveraging Innolux’s support for panels will definitely strengthen both Foxconn TV OEMs and Sharp’s TV set business.
  • Sharp/Foxconn accounted for 12.8% (1.36 million units) of Innolux’s TV panel shipments in the third quarter of 2017, significantly up from 4.3% in the first quarter of 2016.
  • In line with Foxconn’s business strategy, Innolux’s TV set business kicked off in the second quarter of 2017. Innolux started with 50-inch under the Sharp brand in China for Foxconn’s Sky Tiger project.
  • Innolux is aiming to ship 0.1 million units a month in the first half of 2018 with more stable shipments to the Chinese and Indian markets.

Innolux increases TV panel supply to Sharp/Foxconn

After Foxconn acquired Sharp in 2016, Innolux is gradually changing its strategy and integrating into Foxconn Group as an internal panel supplier. Leveraging Innolux’s support for panels will definitely strengthen both Foxconn TV OEMs and Sharp’s TV set business. A growing share of Innolux’s TV customers is shifting to Foxconn and Sharp in 2017.

According to the IHS Markit Display Strategy Outlook Market Brief – October 2017, Sharp/Foxconn accounts for a growing share of Innolux’s TV panel shipments. Sharp/Foxconn accounted for 12.8% (1.36 million units) in the third quarter of 2017, significantly up from 4.3% in the first quarter of 2016. Innolux’s shipments to Sharp/Foxconn were far less than 1 million units before the third quarter of 2016. The increasing supply to Sharp/Foxconn indicates that Innolux is gradually integrating into Foxconn.

Innolux is going to ramp up the TV set business in 2018

Foxconn has been running the TV OEM business for many years, but it is growing at a slow rate. The business is still on a small scale, and there is no enough panel supply. Foxconn is thinking to bring in more TV OEM capacity and resource from Innolux to expand its TV OEM business.

In line with Foxconn’s business strategy, Innolux’s TV set business kicked off in the second quarter of 2017. Innolux started with 50-inch under the Sharp brand in China for Foxconn’s Sky Tiger project. As the average TV size is approaching 50-inch in China, Innolux has also prepared 58 and 65-inch TV OEMs under the Sharp brand. But Innolux’s main TV OEM size under the Sharp brand is still 50-inch.

In August 2017, the company also started to mass produce 23.6-inch, 32-inch, and 40-inch for India’s customers. Producing small-size TVs, such as 40-inch and smaller, is less of a burden on Innolux, which is at the initial stage of its TV set business, in terms of direct integration of its panel and set businesses. Also, demand for small-size TVs is higher in the Indian market due to cost concerns.

Innolux is focusing on aggressively expanding its TV set business. It is aiming to ship 10,000–20,000 units a month in the fourth quarter of 2017. Its monthly targets for the first and second half of 2018 are 0.1 million and 0.5 million, respectively. The target increase is driven by more stable shipments to the Chinese and Indian markets.

Research by Market
Displays
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