China's finance ministry has confirmed that from April 1, 2012, tariffs on imported LCD TV panels without backlight units (BLUs) that are 32 inches and larger will be increased to 5% from 2%. Although the increased tariffs will be beneficial to China-based panel makers, but their ability to improve yield rates soon enough to meet clients' needs is being questioned. And it remains to be seen whether TV vendors who rely on imported panels will hike their prices.

China's domestic market is the world's largest LCD TV market, but growth is already slowing down. Industry observers predict that sales of flat-screen TVs in China during 2012 will see the kind of staggering growth it has had previously, with price competition in mid- to entry-level segment remaining fierce. Chines brand manufacturers have claimed that increased tariffs will not affect the end sale price in the short term, but rather, color TV set manufacturers will absorb the extra costs.

Some panel makers in China were even pushing to have tariffs increased to 8-10%, in order to strengthen their competitiveness. But other firms were expressing differences and said that an excessive increase in panel tariffs would protect China's panel industry in the short term, but if the increased costs are moved to the sales side, this may affect the entire LCD TV industry chain.

In terms of the layout of panel products, the product structure of Chinese panel manufacturers such as China Star Optoelectronics Technology (CSOT) and BOE Technology may not be able to immediately catch up on the first-tier suppliers, such as South Korean firms, who have complete deployment in LED backlighting, 3D technology, as well as 4K2K ultra-high resolution panels.

Source:digitimes