- The Sharp LCD TV business plan for China’s market was revised downward due to poor shipment results in Q1 2018.
- Flying Eagle LCD TVs are on the way to the US market with 65-inch and 70-inch 8K displays.
There is an increasing risk that Foxconn will miss its aggressive business plan for Sharp TV shipments to China in 2018, so Sharp plans to go back to the base-case shipment target for China. The excess panel supply and rapidly falling panel prices are putting pressure on Foxconn Group supply chain participants. Foxconn may want to strategically allocate profits and losses across Foxconn, Sharp, and Innolux so that it can achieve its shipment targets.
According to the IHS Markit TV Display & OEM Intelligence Service, the following are the latest updates regarding Foxconn-Sharp’s TV business plans for the China and North America markets this year:
China – Sky Tiger 2018 TV business plan returns to base case
Foxconn initiated very aggressive shipment targets for Sky Tiger in 2018, but the company recently realized that its goals were too aggressive to achieve. The Sharp LCD TV business plan has been revised to the base case of 6.0 million units, which is the best case for 2018 considering its poor shipment results in Q1 2018. Earlier, it had an aggressive stretch case of 10 million units. Plans for its other captive brand, InFocus, were set at 1.5 million for this year, but this plan has been put on hold.
In Q1 2018, Sharp planned to ship about 1.35 million TVs to China. The key sizes are 60-inch (35%), 45-inch (18%), 70-inch (15%), 58-inch (15%), and 50-inch (10%). However, based on actual shipments in January, February, and March, which were only 0.7 million, Sharp fell short of its target, prompting the business plan revision.
Foxconn is still carrying high inventories, particularly 60-inch and 70-inch. Falling prices on 65-inch from TV brands in China and excess panel supply industry-wide have put pressure on Sharp, which has limited the amount of room it has to lower its 60-inch ASP in China. Therefore, it must shift focus to the 70-inch, whose margin is also under significant pressure.
Foxconn-Sharp is planning to re-organize its management team in China to improve upon weak shipment results in Q1 2018. Sharp CEO and President Mr. J.W. Tai is likely to take over and lead Sharp China’s TV business. SDP’s top management will also have a deeper involvement.
To clear out inventory, Foxconn-Sharp has planned promotional activities for Q2, which may include a buy two-TVs (60-/70-inch), get one free TV (40-inch) program.
Innolux will halt its TV OEM business for Sharp InFocus in 2018, but it will produce a few for Sharp India and supply the SKD (small sizes like 23.6-, 40-, and 50-inch) to Foxconn for customers like Vizio. Foxconn continues to handle and manage the TV OEM business for Vizio.
North America – Flying Eagle LCD TV is on the way, 65-inch and 70-inch 8K displays
Foxconn started the assembly line at Mount Pleasant, Wisconsin, for Sharp commercial LCD TVs (60- and 70-inch) in November 2017. As planned, Foxconn started its LCM/TV set assembly in Wisconsin during April and at the same time built a second TV factory site nearby.
Mass production of Flying Eagle TV products was scheduled for April 2018. These products will be semi-produced at the Foxconn Mexico factory before final assembly in Wisconsin. The product introduction has been postponed to May-June 2018. The 65-inch 8K and 70-inch 8K LCD TVs with mini-LED backlighting, a Keyssa module design, and 8K wireless data transmission will be demonstrated at the upcoming groundbreaking ceremony and will carry the Flying Eagle brand name.
Foxconn was planning for the groundbreaking ceremony in Wisconsin to occur in the first week of May, but it will be held in the middle of June or early July, depending on the US president’s schedule. The latest plan is for the Wisconsin Valley Science & Technology Park Groundbreaking Ceremony to be held on 26 June 2018, showcasing 8K displays, and technology and solutions with a wide variety of applications such as SIP (system in package), IIOT (Industrial Internet of Things), HPC (High Performance Computing), and IoV (Internet of Vehicle).