8K TV is here, with major TV brands offering numerous models and playing up their ability to convert any content to 8K status.  China’s largest panel producer BOE (200725.CH) has joined up with China’s state-owned TV broadcasting service, CCTV to provide the first UHD 8K TV channel in the country.  The two partners will be broadcasting the 2021 Spring Festival Gala during Chinese New Year (2/12/2021) through a trial 8K channel.  That said, in order to see the presentation you would have to travel to the National Grand Theater in Beijing where the festivities will be displayed on a BOE 110” display, noting that the invitation states that this is the first major event live broadcast on an 8K TV channel.
As it turns out, NHK, the viewer sponsored Japanese broadcasting service, has been broadcasting an 8K channel 12 hours a day since the end of 2018, and has broadcast many live sporting events, although we do give credit to BOE for providing the 98” display that Japanese viewers used to watch the 2016 Olympics that were shown in 8K.  That said, there is a nuance with the BOE collaboration that does set it apart from others, and that is the use of 5G, which it intends to use to transmit live location feeds to the broadcast facility, another ‘glorious’ success for Chinese technology, as they put it.
Not that we want to rag on 8K TV, as each step toward more realistic imaging is certainly to be respected, but we do take a step back before we call for consumers to embrace 8K TVs, but before we say a word about 8K content, we note that last year only ~23% of TV sets in the US had 4K capabilities and that 4K content is still spotty.  As with 8K, TV brands will tell you that their ‘upscalling technology’, which includes AI and as many other buzzwords as possible, will make even old HD content look better.  In fact what it does do is fill in the missing pixels that expanding an HD image to 4K creates.  It cant ‘create’ content that was not there originally, but a good upscaler will try to guess what those imaginary pixels would look like based on what is already there.  That’s a lot of ‘filling in the blanks’ for 4K but doing the same for 8K would mean 16 times the number of pixels as in HD, which would need a lot more ‘creation’.
The true test of all TV formats however is their ‘native’ format, which is the resolution in which they were originally shot, and that is where 8K would provide the highest quality. Unfortunately only a few movies are shot in 8K resolution and viewing them in native 8K is not an easy task and usually involves a computer as a playback device.  You Tube () does have some 8K content, mostly nature oriented, but the bandwidth needed to watch that content on a streaming platform is far above what most folks have available, so you would be limited to using your 8K TV to play video games on the Xbox X or the Playstation 5 (extra software needed), although you could record and watch your own 8K video on your Samsung Galaxy S21 smartphone.
All in, its great that China is embracing 8K, but consumers are likely still far away from being able to access any meaningful 8K content in China or elsewhere, and broadcasters, who have been given access to wider swaths of bandwidth to broadcast 4K content have been using it to squeeze in more HD content and many have little interest in upgrading transmission facilities for 4K, leaving 8K as a long-term dream.  We leave it to TV set marketing to try to convince consumers that the world of 8K is upon us and perhaps they are better at that in China, however it seems we still have a way to go before it becomes a reality here, even if Best Buy (BBY) has lots of 8K sets to sell.

​As we noted on 12/15/20, a power blackout in Takatsuki, Japan caused damage to glass production melters at Nippon Electric Glass (5214.JP), aka NEG, which limited the availability of glass from this facility.  While LG Display (LPL), is NEG’s largest customer, the reduction in glass supply could not have come at a more inopportune time as demand across the display space is high, causing glass supply to be tight even before the NEG issue.  That said, it seems that Asahi Glass (5201.JP) faced an explosion at its glass production facility in Paju, South Korea on Friday, which caused damage to equipment and injured workers.  According to the local fire department, the explosion was caused by residual gas (likely hydrogen) in a pipeline that workers were repairing as part of a conversion of some of the plant’s capacity from Gen 8.5 glass to Gen 10.5 glass.
While the extent of the damage is not yet known any damage to glass production is serious given how tight the market is currently.  As we noted last week, Corning (GLW) stated that they are seeing unusually strong glass pricing, with 1Q contracts seeing little or no price declines and some potential price increases, which has not been the case for years.  The overall display glass market is very limited to new players and quite capital intensive, which makes relatively short-term disruptions quite difficult for panel producers who need 24/7 access to glass substrate suppliers.  As the production line at Asahi was already down, it should not have an effect on supply as it stood last week, however if other lines were damaged or the explosion caused damage that pushes back the Gen 8.5 to Gen 10.5 conversion, the glass market could tighten further.

Samsung Electronics (005930.KS) released the latest in its flagship Galaxy S series in 60 countries on Friday, with actual sales beginning in South Korea, North America, Europe, and Southeast Asia, while availability will increase to 130 countries by the end of February.  In South Korea, Samsung is both extending the pre-order period to 2/4/21 due to a lack of available product and is offering a 3 day ‘rental’ program that allows consumers to try out the phone before buying.
Samsung is expected to ship ~26m units of the S21 series this year, which is roughly the same as last year’s S20 series, which was not considered a major success internally, as the company expects COVID-19 will still limit in-store sales this year.   The top model however, the S21 Ultra, is expected to represent ~30% of shipments this year (8m units) which is above last year’s version, which proved more popular than the company had expected, leading to shortages.  The S21+ is also expected to ship ~8m units, while the least expensive S21 is expected to ship ~10m units.
Samsung has ordered slightly more components for these phones than last year despite the flat sales expectations as some components are in short supply, including Samsung’s internally produced Exynos processor, which replaces the Qualcomm (QCOM) Snapdragon 888 in the series’ international models (US and China models use Qualcomm).  As Samsung’s foundry has relatively limited additional capacity, the Exynos has to compete with other components that Samsung produces and could potentially be a limiting factor for the S21 series this year.
The US ban on Huawei (pvt) will take its toll this year, reducing Huawei’s smartphone sales considerably, already forcing the company to sell its lower-tier brand Honor (pvt) recently.  This incentivizes other brands to step up their efforts to capture some of Huawei’s lost share, increasing competition and likely adding to Samsung’s relatively conservative stance on Galaxy S21 shipments this year.  Samsung did reset prices for the S21 series by $200 on each model (lowest memory configuration), which amounts to a 20%, 16.7%, and 14.3% reduction respectively, but still faces increasing competition, particularly from Apple (AAPL), who was second only to Huawei last year in 5G smartphone shipments, beating Samsung by over 10m units, despite having released the iPhone 5G series in October.

​Carriers make many claims about 5G service, some of which are either misleading or downright false, however there are those that actually study the performance of such things in a real-world environment, with results that tend to be far more realistic than the general claims made by carriers.  In downtown Minneapolis, a city that has been a leader in establishing 5G coverage, a study was done by The Signals Research Group in June of last year that focused on mmWave coverage in downtown Minneapolis to better understand what customers might experience when using the service.
The testers walked the route shown below and recorded uplink speed as they walked, with each colored dot representing a point at which a reading was taken.  While we cannot plot the tower locations themselves, it is quite obvious that uplink speeds varied considerably, from 80Mbps to areas where 5G coverage disappeared completely.  Given the sensitivity to obstructions, and therefore direction, the direction in which the smartphones were pointing (arrows) had an effect on performance, which would not be the case using sub6 bands, but this test was limited to mmWave only. As the key is not available we summarize the dot colors with black being no connectivity, red, yellow and green being 1Mbps to 10 Mbps, blues = 20Mbs to 40Mbs, and pinks and purple – 50Mbs and above.
As can be seen, the real-world results vary considerably, and while we expect 5G coverage has increased since the test, much of what would be added would be sub6 5G at lower speeds, less directional and varied coverage, and while this would point toward carriers building out sub6 5G over mmWave 5G for the general public.  mmWave is obviously best suited for fixed installations where coverage is optimized and remains so at the site.  Internal distribution of high bandwidth at such a location could be done in  a variety of ways with internal uplink speeds determined by the internal system rather than the tower link, all in, a far better way to utilize the bandwidth and speed that mmWave supplies.

While South Korea is not a particularly large market in itself, representing .65% of the total global population, it is home to of the largest CE and display companies, and as such, absolute numbers are less important than growth rates in order to generate useful data.  Aside from 3Q ’20 share, which indicates that the top two brands have a combined share in their home country of 63.5%, down from last year’s ~70%, the total rate of change on a y/y basis was over 35%, against what was a relatively strong shipment quarter in 2019.  Samsung’s gain was obviously a big driver for y/y comparisons, along with Apple and Lenovo (992.HK) to a lesser degree based on units, with LG (066570.KS) the weakest in the top 5, but players in the middle tier saw some unusually strong gains as COVID-19 brought consumer’s attention to slightly less popular brands, with Hansung (pvt), a gaming laptop brand, taking the prize for the largest gain.  All in it was a very competitive year for notebooks in Korea and while perhaps less so to the top known brands, a rising tide lifted all boats, at least through 3Q..