Samsung Seen Among ‘Winners,’ Best Buy, Vizio the ‘Losers,’ if Tariffs Go Though

Samsung has “a full range of TV products from large sizes produced in Mexico and the small sizes imported from Vietnam,” said O’Brien. “So what Samsung did, after the Trump election, but before 2018, is they shifted their production from China to Mexico.” Candidate Trump during the 2016 campaign was "adamant about creating a new environment for a trade war" with China, said O'Brien. Perhaps Samsung was "listening to Trump’s campaign rhetoric," he said. Samsung didn't comment.

During Q1, well before the U.S. Trade Representative's office released its list of products targeted for the proposed tariffs, TV imports to the U.S. from China "accelerated" compared with Q1 a year earlier and shipments from Vietnam "just flew through the roof," said O'Brien. This when overall TV shipments to the U.S. declined, including a significant decrease in shipments from Mexico, he said.

DSCC thinks Sony and LG will have little exposure to the tariffs on Chinese TV imports, said O’Brien. Sony has “no TV imports from China and a higher-end focus,” while LG “has a plant in China and is likely to shift production to Mexico,” he said. Chinese brands like Hisense and TCL would be among the “losers” if tariffs go through, as would Vizio and Best Buy, which source most or all of their TV product from China, he said. “To a certain extent, the whole display industry could be a loser if and when demand slows down because of the higher prices” that tariffs would bring, he said.

Best Buy and TCL testified against the tariffs at the USTR's series of hearings last week (see 1805170067). Vizio filed comments in which it also opposed the tariffs, and asked the USTR to impose a “product exclusion process” that exempts U.S. innovators from the higher Chinese duties if they take effect. Hisense has been silent.

If Foxconn follows through with plans to build an LCD display factory in Wisconsin (see 1711130014), “it will be interesting, if it happens, to see a new display industry in the United States,” said O’Brien. He thinks there’s a “little better than 50 percent chance” that Foxconn builds and operates the plant, though it’s “not a slam dunk yet,” he said. Foxconn scheduled a formal groundbreaking ceremony at the site June 28, but “they’re moving dirt” already, he said. “Things are happening.”

The Foxconn campus in Wisconsin would include a Gen 10.5 LCD display fab, a precision-molding factory and an assembly facility for producing finished TVs, said O’Brien. “The plan is to start with TV assembly,” he said. “We think that’s going to happen in the second half of this year.”

Though Foxconn-owned Sharp won’t have rights to market TVs in the U.S. under its own brand until its license agreement with Hisense expires at the end of 2020, “our understanding is that Sharp may be launching TVs under an InFocus brand,” said O’Brien. “We’ve had some intelligence that they may be doing that, or under a new Flying Eagle brand where they would have a trademark of that product.” Sherry Chapman, senior director-brand management for Sharp Consumer Display in Santa Ana, California, emailed us Monday to say O’Brien’s statement was “incorrect,” declining “further comment.”

Display Week Notebook

Quantum dots materials supplier Nanosys will be “qualifying” its next-generation P6 QD production line in Milpitas, California, this quarter, said Russell Kempt, vice president-worldwide sales and marketing. Kempt isn’t “authorized” to disclose the production capacity of the P6 line, but it’s significantly larger than that of the existing P4 line, he said. Samsung Display is showcasing a QD on glass TV prototype on the Display Week exhibition floor, said Kempt. Nanosys announced at CES it’s working on QD-based glass light guide plates under the proposed trademark “QDOG,” and TVs incorporating the technology will debut on the consumer market this year (see 1801150003). QDOG enables TVs with lower costs and thinner form factors than sets based on QD enhancement film, says Nanosys.

Looming commercialization of consumer 8K displays is stirring debate in the cinematographer community, said David Stump, director-photography for the American Society of Cinematographers. On the one hand, 8K resolution “exceeds the human visual acuity and therefore is trying to solve a problem, at least in some display cases, that doesn’t exist,” said Stump, an Academy Award-winning cinematographer whose credits include Quantum of Solace, X-Men and Into the Blue. “But at the same time, I’m working with a company who are building a 16K camera and who are specifically tailoring that 16K camera to a giant LED display system that is pixel for pixel the same resolution as the camera itself,” he said. For Hollywood, “there comes a tradeoff in economics,” said Stump. “Is the amount of storage required to shoot a 4K or even an 8K project justified in the face of where it will be displayed and at what size it will be displayed? How many screen heights away from the screen do we sit on average to actually view content?” If one views a small 4K TV screen from across the living room, “probably 4K has less value than if you’re sitting in the [TLC] Chinese Theatre and you’re watching 4K that is 50 feet wide,” he said.