Speaking of Price Increases…
Last September a number of Chinese TV set brands increased prices. The increases were relatively moderate, between $15 and $30 US, with selected models rising over 15%, but as panel prices have continued to rise, we expect another round of similar or greater price increases to be put in place in the spring, including TCL sets, who have been excepted from most price increases. TCL owns Chinese panel producer Chinastar (pvt), which not only gives them a guaranteed source of panels but gives them a lower cost than if they were to buy such panels in the open market, meaning from other panel producers.
This advantage, also shared to a degree by Samsung and LG, can only protect set prices for so long, and we expect TV set prices at TCL to join the next round of price increases regardless of their protected supply. Chinastar can only survive if they remain competitive with other panel producers and while they might supply some panels to parent TCL for less than market prices, they cannot without underperforming the rest of the industry which shareholders tend to use as a guideline.
This advantage, also shared to a degree by Samsung and LG, can only protect set prices for so long, and we expect TV set prices at TCL to join the next round of price increases regardless of their protected supply. Chinastar can only survive if they remain competitive with other panel producers and while they might supply some panels to parent TCL for less than market prices, they cannot without underperforming the rest of the industry which shareholders tend to use as a guideline.
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