LG Samsung Says "Interrupted Monopolistic Behavior"

On January 4th, the National Development and Reform Commission announced the investigation and prosecution of price monopolies for six LCD panel companies, including South Korea's Samsung, LG, Chi Mei, and AUO in the Taiwan region of China, resulting in economic sanctions totaling 353 million yuan. The opinion of the industry believes that this punishment has positive significance for maintaining the order of the Chinese market; however, domestic color TV manufacturers should also actively seek technological transformation. “Entering the upstream LCD panel industry is the only way out for domestic TV brands.”

60% cost of color TV is LCD panel

From the cost structure of the entire color TV, the LCD panel can reach 70% in the past, and it can still reach 50% to 60% of the market. According to the investigation of the National Development and Reform Commission, from 2001 to 2006, South Korea’s Samsung, LG, and six companies in Taiwan’s Chi Mei, AUO, Chunghwa Picture Tubes and HannStar’s Taiwan, held regular meetings to negotiate prices for LCD panels to manipulate the market to form monopolies. And has a significant impact on China's color TV companies.

In fact, since 2004, with the rapid recognition and acceptance of LCD TVs by Chinese consumers, the demand for LCD panels in the Chinese market has increased substantially. However, due to the monopoly alliance formed by related foreign companies, domestic color TV manufacturers without upstream LCD panel production capacity are in a passive position.

In addition to monopolizing prices and manipulating the market, after 2004, the panels sold by these companies to Chinese companies did not have any quality guarantee agreement. Until 2010, Samsung and LG were only willing to implement the 18-month warranty, which was far lower than that of color TV companies. 36 months warranty commitment.

LG Samsung responded

Samsung and LG who were punished by the National Development and Reform Commission responded. LG's LCD panel company LG Display (LGD) stated that the company "has formulated a series of systems to prevent similar incidents from happening again and adheres to the principle of transparent operation," and emphasized that the penalty is for the LCD panel industry from 2001 to 2006. The implementation of the price monopoly event will not have any impact on the sales of LGD and its relationship with major customers. Samsung said that from the end of 2005 “has already interrupted related activities, constructed a law-abiding management system and strictly implemented.”

Non-technical innovation can only sit still

Liang Zhenpeng, a senior observer of the home appliances industry, believes that the LCD panel makers in the country are being sanctioned as "an exciting and exciting event." However, in reality, domestic color TV brands are generally used to marketing-driven strategies, and few think about technology-driven enterprises. Transformation. “The vast majority of home-made color TV brands that do not have upstream LCD panel plants are completely in the state of being panel makers.”

In the period from 2001 to 2006 when the six companies that had been punished for the price were the most closely entrenched, many domestic color TV brands were delisted or even went bankrupt because of their difficulties in operations and huge losses. The sharp decline in market share caused by severe shocks included Xoceco, Amoi and Shinco, domestic brands that had “take the limelight”.

"Whenever the LCD panel market is in short supply, the hardships of downstream TV operators will come." Liang Zhenpeng believes that entering the upstream LCD panel industry is the only way out for domestic color TV brands. "Insufficient ability is another matter, but if there is no courage, we can only sit still."