​Chinese brands are not known for their advertising subtlety, adding adjectives such as glorious, triumphant, and industry-leading to announcements of accomplishments or industry metrics.  With the end of the Chinese 11/11 shopping holiday now upon us, a number of Chinese brands have begun to offer up results.  In a ‘super-burning’ report, Chinese brand TCL (000100.CH) has indicated that it exceeded 2.187b yuan ($342.7m US), a 36.7% increase over 2020 sales, a new record high, although it does not qualify whether this was for an extended period or for a single day total. 
That said, TCL notes that an outstanding product this year was its Mini-LED QD TVs, for which it describes itself as the QD/Mini-LED product leader, Mini-LED backlight leader, the world’s leader in QLED technology, and the top ‘comprehend the AI chip’, which we take to mean the use of AI in Mini-LED displays.  They go further in noting that they have annual production capacity for 10m units, 470 related patents, and are the sales leader (QD/Mini-LED) in North America, Europe, and China.  They also specify that their Mini-LED backlights are not PCB based but are deposited directly on glass, a distinct cost advantage, and are actively driven, rather than the passive drivers used by some.  Not leaving out that 9 out of every 10 Mini-LED TVs that have been sold (goes back to 2018) have been TCL’s, the company rarely misses an opportunity to mention that it has been researching and producing Mini-LED TVs for considerably longer than both Samsung and LG (066570.KS), who are both new entrants to the product line and have relatively weak Mini-LED manufacturing capabilities, citing 2020 statistics, but do not cite 2021 metrics, given both TV giant’s entry into the Mini-LED/QD market earlier this year.
We certainly give TCL credit for moving ahead with Mini-LED TVs years before others were in production and also give them credit for being the price leaders, as we have noted previously, but 2018 through 2020 were the easy years, where the only competition was from other TV technologies.  While both Samsung and LG, along with Sony (SNE), are new to the market this year, we expect the competition to increase as all three build out their supply chains and ramp production.  This is the right year for TCL to celebrate its success with Mini-LED/QD TV as next year there will be new players and lots of marketing from TV brands.  Take the victory lap.

​According to an announcement by the Shenzhen government, TCL (000100.CH) owned Chinastar (pvt) aka Huaxing Optoelectronics, has petitioned to acquire land adjacent to its T6/T7 production fab in order to scale production.  The overall project is expected to increase T6/T7 combined capacity by 60,000 sheets/month.  The project includes an operations center and R&D center for TCL’s TV products and commercial display business, the additional production capacity, and housing for company employees. 
Chinastar currently operates two Gen 8.5 and two Gen 10.5/11 fabs in Shenzhen, with the larger capacity fabs currently totaling 180,000 sheets/month maximum capacity.  While some of that capacity is shared with OLED production, Chinastar/TCl has barely begun to produce OLED displays and we have seen no indication that they have solved OLED production issues for large panel production on Gen 10.5/11 lines..  That said, part of the new construction project, aside from the increase in LCD capacity, is to go toward “a production base for semiconductor display materials, devices, equipment and downstream applications” which would likely indicate a module line, and “…high-performance vapor-deposited organic light emitting display tube localization project, printed OLED display localization material project…” which sounds like it would be either an OLED pilot line or similar type project.
While the ultra-large LCD panel market remains the most lucrative in terms of LCD TV panel production and as a source for TCL’s growing TV business internally sourced production is ideal, we wonder whether consideration has been given to the longer-term prospects for large panel display production.  There are certainly efficiencies to be had by using Gen 10.5/11 fabs to produce 77” and 88” TV panels, but at ~14% of the TV market currently, those sizes will be somewhat limited to a subset of consumers despite an increase of 4.4% share over 2020 

Each year the lead-in to Black Friday gets extended, with deal ads starting in October and the actual Black Friday (11/26) day itself starting for many retailers on Wednesday, November 25.  Last year many brick & mortar retailers gave workers Black Friday off and closed stores to avoid crowds during the height of the COVID-19 pandemic and relied on increased on-line sales to make up the in-store selling day loss.  While we expect there might still be some store closings, on-line shopping has already become so ingrained in our culture, especially in the 25 – 34 year old bracket, that missing the overnight camp-outs in front of Wal-Mart (WMT) will likely not be missed by many.  In fact, a recent survey of 1,000 consumers who plan to shop between September and Cyber-Monday indicated that only 30% of respondents thought that stores should still remain open and have door buster sales, with 39% preferred the stores to stay open but have no door buster sales, while 31% stated that they would prefer the stores to remain closed on Black Friday. 
On a more general basis, an Offers.com (ZD) survey indicated that 20% of shoppers expected to increase spending during the holidays this year while 21% expected to reduce spending, so the overall consumer spending pattern will likely remain on track with recent years.  That said, now that the press has taken up the story on supply chain issues that might affect holiday deliveries, Black Friday early discounting serves the purpose of lengthening the time when orders might be placed, which gives retailers more wiggle room on delivery schedules, so said supply chain issues do lend some legitimacy to an extended holiday season, but at the same time consumers have also become used to those last minute ‘Super Savings Discounts’ that pop-up on peak buying days, which might not look as attractive if discounting has been in place for over a month.  That, coupled with consumer electronics’ inflationary characteristics this year could make it a bit more difficult for consumers to find the bargains they have become used to, especially if there are delays in delivery times.

While it is impossible to get an accurate picture of holiday CE deals across a large swath of products, we look back at one area where we have hard data, Samsung’s (005930.KS) Mini-LED/QD TV line, which we have been tracking since the products were announced in May.  As a reminder, this was the first year Samsung has offered a TV line that was based on Mini-LEDs, which gives us the opportunity to see how effectively Samsung priced the models at the onset, and how those prices have been trending to date, especially as we head into the holiday season.  We check Samsung’s Mini-LED/QD TV prices roughly every two weeks, although when we are contacted by Samsung as to ‘price drops on products you have viewed’, we check to see if there are any unusual pricing movements.
Based on our data, it seems that Samsung has already begun its holiday discounting program, at least for its Mini-LED/QD TV line, as the most recent tally has indicated that prices for much of the line have again reached their lowest point since release in late May.  In fact of the 33 models we track, 29 are at their lowest point since release, while 2 are at their highest (actually unchanged from the initial price) and the top of the Mini-LED/QD line (8K) is now 36.7% below the initial price, dropping over 10% over the last week, while the 4K Mini-LED/QD are down less, but also saw price drops between 2.8% and 8.2%.  Samsung’s quantum dot only sets fared a bit better, down between 0.0% (low-end QD only line) and 4.4% (hi-end QD only). 
While these prices, especially at the high-end of the line are significantly discounted from initial list price, they are also competing with Mini-LED TV price leader TCL (000100.CH), who is on their 3rd Mini-LED/QD iteration, and LG Electronics (066570.KS), who has pricing more comparable to Samsung.  TCL has far less name recognition in the US than either Samsung or LG, but has gained much recognition as a low-cost alternative to premium sets from other major TV brands at retailer Best Buy (BBY).  While feature-to-feature comparisons are difficult, TCL’s Series 6 Mini-LED/QD line directly competes with Samsung’s 4K Mini-LED/QD line and while TCL offers a limited number of comparative models, they are priced far below even Samsung’s lowest tier Mini-LED/QD sets.  TCL has already discounted their Mini-LED TV sets from list, so we would expect less discounting going forward, but with models between 46.2% and 51.9% below Samsung’s comparative pricing, the difference to consumers is obvious and continues to keep Samsung Mini-LED/QD prices under pressure.

China’s TCL (000100.CH) is on their 3rd iteration of Mini-LED TVs, while typical leaders Samsung Electronics and LG Electronics (066570.KS) are on their 1st.  As we have noted previously, TCL has also been the price leader in the Mini-LED TV space and is one of the reasons Samsung has been changing prices on its Mini-LED/QD TVs on almost a weekly basis.  That said, TCL also noticed that Samsung’s product line-up is more extensive than theirs and includes a number of high-end models that were not part of the TCL Mini-LED/QD line.  In order to remedy that situation and capture a portion of the premiums associated with such high-end models, TCL has just released two new Mini-LED sets, both 8K models, in three sizes, 85”, 75”, and 65”.
Again, we note that comparing feature sets in TVs is quite difficult as not only are not all features specified for each TV model with the ‘value’ of features specific to a particular brand subject to great variability, but specs like ‘lots of’ or ‘thousands of’ leave a bit too much to the imagination.  That said, what is notable with these new TCL Mini-LED TVs is that while the TCL model shown in the table is 11.3% less expensive than a comparable Samsung set, it is not the more typical 20%+ less featured and less expensive that has been the go to TCL vision.  It seems that TCL has gotten a taste of the ‘high life’ and is willing to play into the same premium pricing plans that Samsung and LG have been working toward, at least for their Mini-LED/QD sets.  Whether TCL will sell enough of such high-end sets to make a difference remains to be seen, but it was likely an easy decision to give it a try now that others have set pricing at the high-end of the market.