There’s a paradox looming in the 2021 LCD TV supply chain between set makers planning to increase their panel buys and panel makers cutting TV display capacity to reconfigure production lines for in-demand laptop screens, reported Omdia Monday. Top global TV brands are expected to increase their panel buys by 9% over 2020 if they're able to secure supply, it said. “Panel makers are prioritizing their panel supply to their strategic or preferred top tier TV makers who can sell TVs with advanced features at a higher premium, rather than to the low-tier TV makers whose TVs are priced at low value in the market,” said Omdia.
Q3 revenue at LG Display increased 27% sequentially from Q2, “driven by a continuous rise in panel shipments” for laptops and tablets, due to the “growing trends of working from home and online schooling,” it said Thursday. “Strong global TV sales,” plus the start of full-scale mass production at LGD’s OLED panel plant in Guangzhou, China, also contributed to the revenue increase. LGD switched some Korea-based LCD production lines from TVs to laptop panels to “respond flexibly to customer needs and the short-term supply and demand situation,” it said. Industry shortages of laptop LCD panels and components impeded sales as the supply chain struggles to meet spiking consumer demand for notebook PCs as “essential” work-from-home and remote-learning connectivity tools, said market leaders Dell and HP in late August (see 2008280012).
The coronavirus is having mixed impacts on one tech company. IRobot anticipates “going back to a world” of 25% U.S. tariffs on Chinese-sourced goods once its exclusion expires Dec. 31, said CEO Colin Angle on a Q3 call Wednesday. The pandemic delayed iRobot’s “original plans” to shift most U.S.-bound production to Malaysia by the end of 2020 to reduce or eliminate its Chinese tariff exposure, instead pushing the move “well into 2021,” he said. The stock closed 13% lower at $83.48, a day after reaching a 52-week high of $98.55. Work and learning from home helped drive 43% Q3 revenue growth, said Angle. “The pandemic has impacted individuals and families in profound ways with the home becoming a primary hub for work, education, exercise, entertainment and more.” IRobot took part in its sixth straight Prime Day event last week, said Angle: “Despite the change in Prime Day from its usual timing in early July, it was a solid event.“ IRobot "is cautiously optimistic for a strong fourth quarter,” said Chief Financial Officer Julie Zeiler. “It remains to be seen how the pandemic, an uncertain economic environment and the shifting of an event like Prime Day from July to mid-October will influence the holiday gift-giving season.” The “incredibly challenging period” forced iRobot to make supply-chain “adjustments” to “keep up with demand,” said Zeiler when asked about a notice on the company’s online store it's experiencing shipping delays. “Given all of the growth, there is occasionally a situation on our website where shipping is delayed,” said Angle. “We have the systems in place to make those types of disruptions very short.”
Taiwan Semiconductor Manufacturing Co. Q3 revenue increased 17% in U.S. dollars sequentially on "strong demand for advanced technologies and special technology solutions” in 5G smartphones, high-performance computing (HPC) and IoT applications, said Chief Financial Officer Wendell Huang on a Thursday investor call. Smartphone revenue increased 12% and was 46% of third-quarter sales, he said. TSMC continues to expect “faster penetration” of 5G smartphones compared with 4G, he said. “For this year, we still forecast a high-teens penetration rate and next year even higher.” Though the pandemic brings “some level” of negative impact to global economies, “COVID-19 is accelerating digital transformation, while 5G and HPC-related applications continue to drive semiconductor content enrichment,” said CEO C.C. Wei. He expects TSMC customers to maintain inventories well above their seasonal levels as a buffer against further COVID-19 supply-chain disruptions. Due to the “uncertainties” of the supply chain now, expect the high-level inventory trend to “continue for a longer period,” he said. TSMC won’t use any “short-term supply shortage” as an opportunity to raise “our wafer price,” he said. TSMC forecasts that semiconductor industry revenue, excluding memory, will rise by mid-single digits in 2020, he said. TSMC is “evaluating the impact to the semiconductor industry” from DOD’s export restrictions on Semiconductor Manufacturing International, China’s largest chipmaker, said Wei.
The pandemic is accelerating global cord cutting, with worldwide pay-TV market subscribership likely to decline slightly this year to 1.07 billion, ABI Research said Wednesday. Cancellation of many live sports events resulted in fans dropping their pay-TV packages, it said. Cord cutting had been largely occurring in mature markets with high broadband penetration, but the economic effects of the pandemic are also driving cord cutting in emerging markets, it said. Those losses are likely temporary, with sports fans returning and pay-TV growth in emerging markets beyond the pandemic, it said: The global subscriber base is expected to hit 1.1 billion by 2025. The Diffusion Group said Wednesday it sees more than half of U.S. broadband homes without an MVPD service by 2025, with pay-TV services losing 36% of their 2020 subscriber base. Between 2015 and 2020, they lost 9.5%, TDG said. Currently, 27% of U.S. broadband households are without an MVPD service.
Wide availability of 5G smartphones will drive fifth-generation adoption to 2.3 billion users by 2024, projected Credit Suisse Monday. The launch of the first 5G iPhone “is set to be a key catalyst for 5G uptake,” especially in the U.S., it said. Apple jumped into the 5G era Tuesday, introducing four 5G iPhones (see 2010130043). “While applications are potentially exciting, there is no 5G ‘killer app’ for mass market consumers as yet, in the way that streaming media was for 4G uptake.” Most 5G launches so far focused on high-volume data bundles and handsets, rather than apps, limiting expected revenue growth through 2024, the analysts said.
Global supply chains are confronting an “evolution” that will completely change how chief supply chain officers (CSCOs) organize and run their organizations, reported Gartner Thursday. A good supply chain in the past was “efficient and powerful,” but it must now be “agile and fast,” it said. Uncertainty is the new “constant” in supply chains, said Gartner. No one knows "where the next competitor will come from and what their impact will be,” it said. Nearly half of CSCOs Gartner canvassed expressed concern “that their business is at risk of being disrupted in the coming years, with the greatest risk coming from nontraditional businesses such as startups,” it said. Uncertainty from the U.S.-China trade war remains a looming threat that won’t go away soon, it said. “More recently, the COVID-19 pandemic has raised concern about future pandemics, after shutting down global supply chains and trade routes.” The ongoing uncertainty “calls for a new approach to supply chain management,” it said. “CSCOs must build more flexible and resilient networks that can respond effectively to global shocks and disruptions -- be it caused by nature or a competitor.”
Four of six LCD monitors exported as e-waste to Guatemala were in “likely violation” of the country’s import laws and Dell’s corporate policy, said the Basel Action Network Wednesday. GPS monitoring of recyclers and takeback programs found the electronic waste LCDs were exported after a donation to the Dell/Goodwill partnership known as Dell Reconnect, the partnership’s third such violation, said BAN. Under the Basel Convention, it's illegal for Guatemala to receive electronic waste from the U.S. All Reconnect program electronic waste should go directly to Dell recycling partners, but six broken mercury lamp back-lit LCD computer monitors fitted with GPS trackers that BAN delivered to a Washington, D.C., Goodwill store never went through the proper Dell recycling process, BAN said. Four of the monitors went to Guatemala City, two others to solid waste disposal companies in Maryland, it said. According to Dell, which BAN contacted, the flat screens were accidentally put into a bin full of used textiles at Goodwill. Goodwill of Greater Washington says it will take two corrective actions: require Whitehouse and Schapiro (the likely exporter) to set aside any found electronics and agree to refresh employee training, said BAN. Dell didn't comment Thursday.
Demand for connectivity tools to fill remote work and learning needs during the COVID-19 pandemic fueled import growth in laptops and tablets, according to Census Bureau statistics we accessed Wednesday through the International Trade Commission. U.S. importers sourced 49.02 million smartphones from all countries in Q3, a 22% sequential increase. Unit imports declined 8.9% from the 53.83 million smartphones shipped here in Q3 2019. Imports of $11.67 billion were 20% higher than Q2, down 14% year over year. The average smartphone from China, the dominant source, was $251.41, 1.5% cheaper than in Q2 and a 5.8% drop year over year. U.S. importers sourced 34.26 million laptops and tablets from all countries, increasing 10% from Q2 and 29% jump from third-quarter 2019. Major PC vendors and their retailers said laptop shipments would be even higher if not for parts shortages. Q3 imports of $14.3 billion were 5.1% higher than in Q2, and up 32% from a year earlier. The average import was $417.40, nearly 5% cheaper than Q2 and up 2.6% from the 2019 quarter.
The order Philips seeks at the International Trade Commission on Hisense, LG and TCL smart TVs and Dell, HP and Lenovo PCs for allegedly infringing four secure authenticated distance measurement patents (see 2010050047) would have “deleterious effects on the public interest,” posted MPA (login required) Tuesday in docket 337-3492. Delegate authority to an administrative law judge “to develop a full evidentiary record on the public interest and make recommended findings,” asked the trade group. The import ban would exclude “a wide range of digital video-capable electronics,” including tablets, computers and smart TVs, that incorporate high-bandwidth digital content protection, said MPA. Without HDCP, unencrypted copyrighted content can be “illegally misappropriated with a few clicks,” the association said. The U.S. content industry would face “more detrimental economic consequences from rampant piracy,” which costs creators at least $29 billion annually, said MPA. “Any remedial order preventing the use of HDCP, without viable alternatives, would thus interfere with Congress’ long-standing policies” under Chapter 12 of the Digital Millennium Copyright Act, it said. The accused devices with HDCP “are widely used in the U.S. and globally to provide secure delivery of entertainment, web-browsing, streaming video, and gaming,” said MPA. “HDCP protects content flowing from a streaming device, game console, Blu-ray player, or set-top box on an HDMI cable to a television display. Billions of devices implement HDCP." Philips didn’t comment.