List 4 Tariff Threat ‘Much Less Likely to Be Resolved’ Than Mexico, Says Supply-Chain Analyst

List 4 is “going to hit TVs, it’s going to hit phones, it’s going to hit monitors, it’s going to hit laptops,” said O’Brien. “You’re going to see supply chains shifting.” More TV units come from China, “but more dollars come from Mexico,” he said. The U.S. imported 3.47 million finished TV sets from Mexico in Q1 this year at an average customs value of $452.45, compared with 5.07 million TVs imported from China at an average value of $201.18, show International Trade Commission data (see 1906030041).

If the List 4 tariffs go through on TVs, O’Brien sees TV makers shifting their sourcing to Mexico from China, “probably without a huge amount of disruption,” he said. “If you’ve already got a production center in the border zone of Mexico, as Samsung has, your choice is either to go to a third place or you just expand your production to include the 32-inch and the 40-inch TVs that you’re currently importing from China. I don’t see that as a big disrupter of the U.S. TV market.”

There’s a “big oversupply” looming in flat panels that suggests significant TV pricing declines to come, said O’Brien. “We’ve got a TV market that in unit terms is essentially flat,” with panel fab capacity that’s “growing by double digits,” he said. Panel prices for 65-inch TVs have fallen 50 percent in the past 24 months, said O’Brien. The 65-inch 4K TV that costs $500 as the “opening price point” this year will be $400 next year, he said.

More than 140 movies have been “committed or released” in HDR10 Plus, which has 70 “adopters,” and more than 200 “listed products that are certified,” said Bill Mandel, Samsung Research America vice president-industry relations. Mandel is point person for the HDR10 Plus consortium of Fox, Panasonic and Samsung, which started licensing the dynamic-metadata-based HDR platform a year ago as a royalty-free alternative to Dolby Vision (see 1806200045).

“Everything on Amazon Prime has been in HDR10 Plus for a while,” said Mandel. “That’s a lot of content. There’s still not a lot of distribution, and that’s what we’re working on now.” All TV makers “have access now in their SoCs to HDR10 Plus,” said Mandel. “This will enable putting the HDR10 Plus metadata on the whole lineup” of TVs from a given manufacturer, not just on selected models, he said. “I think you’re going to see a lot of volume that way.”

Expect announcements soon on HDR10 Plus support “from various TV makers,” said Mandel. “There’s one major American TV maker that’s not on the list” of HDR10 Plus adopters, but the chip it’s using supports HDR10+ and “it’s a pretty advanced solution,” he said.

“The vast majority of televisions that are sold are mass-market, volume-zone type products,” said Mandel. They’re “capable of pretty good HDR playback,” but they require dynamic metadata, scene by scene, to apply the best processing, he said.

Volume TVs, “when they attempt to do HDR, and they don’t know too much about the content, there’s a lot of edge cases that come up,” said Mandel. “You may get a bright image, but you may not get the best performance.” HDR10 Plus “can help these televisions a lot,” he said.

With HDR10 Plus, “there’s a lot of reach with devices now,” said Mandel, acknowledging most of the certified TVs on the market are from Samsung and Panasonic. HDR10 Plus compatibility is available on Samsung Ultra HD TVs dating back to 2016, he said.

“In discussions with other TV makers that may announce later" their HDR10 Plus support, "we’ll see how the next few months play out, but we expect to have a lot of reach, and a lot of depth to the reach,” said Mandel. “When people make announcements for HDR10 Plus, it’s going to be across the whole lineup, not just a single SKU in the lineup.”

HDR10 Plus is a “collection of image metadata that allows any device to optimize HDR picture quality,” said Mandel. “Each TV will cherry-pick what it needs to use to render the best image processing.” The platform is “resolution-independent,” and optimized for full Rec.2020 color, he said. It’s capable of 10,000 nits of peak brightness, though 4,000 nits is the current cap because that’s what reference monitors can do, he said.

8K Display Summit Notebook

Don’t expect the first manifestations of the next-generation Versatile Video Coding (VVC) codec (see 1903140012) to deliver on its promised 50 percent bit rate reduction compared with H.265, said Mauricio Alvarez, CEO of Spin Digital, which specializes in video compression solutions. VVC, also known as H.266, is scheduled to be published as an international standard in July 2020, said Alvarez. Tests that Spin Digital has run using VVC “reference samples have delivered 37 percent bit rate reductions over H.265, he said. Reducing bit rates using VVC definitely has its costs, he said. Achieving the 37 percent reduction requires VVC encoders with 10 times the “complexity” of H.265 equipment, he said.

Nanosys used the summit to debut an “abstract short film,” Quantum Flows, available on YouTube and shot in 8K HDR with Rec. 2020 color by director Phil Holland. The film “explores the vividly colorful world” of Nanosys quantum dot nanocrystals that “few consumers have seen,” said the company. The project required Nanosys scientists to develop a “new formulation and process” for “trapping” the quantum dots in “tiny polymer spheres just a few microns across,” enabling them to be easily dispersed “in a variety of liquids, pastes and oils,” it said.