Korean TV makers set to drive Ultra High
Definition (UHD) TVs in 2013
 Benefits of UHD TV: accelerates size
migration and converges with mobile
devices
 Revitalises traditional LCD food chain;
pushes back AMOLED TV introduction
Looming price war in large size TVs: We believe there was a
price war among LCD TV makers for larger size (>55”) TVs
during the Thanksgiving holiday season as Vizio cut the price
of its 60” model to below USD700 (see Asia LCD: Supply
shortage coming, 27 September). We expect Korean LCD TV
makers to follow suit; otherwise they risk losing market share in
the US.
UHD TV the next wave in LCD TVs: We expect Korean
LCD TV makers to drive UHD TVs starting from CES 2013 as
they provide various benefits, including 1) a shorter viewing
distance such that >60” TVs better fit a normal room size, 2)
superior picture quality for a better viewing experience and 3)
convergence with mobile devices such as smartphones and
tablets given no deterioration of picture quality.
ASP should improve for high-end TV makers: The benefits
of UHD TV should be enough to drive a replacement if the
price is right. We estimate UHD TV pricing could be set at a
40% premium to current high-end LED TVs, which could
trigger replacement demand in the high-end segment. As a
result, we estimate UHD TVs will take 2% and 6% share of the
overall LCD TV market in 2013 and 2014 respectively, and
drive ASP and margin improvement for high-end TV makers
such as Samsung Electronics (an Asia Super Ten stock) and
LGE.
Reiterate OW(V) on LGE and LGD and remain cautious
on the Korea OLED food chain: We think increased demand
for UHD TVs will improve ASP and margins, however
selectively for the high-end TV makers. In contrast, the
lowering in priority of OLED TVs by Korean TV set makers
may slow capacity additions by OLED panel suppliers, which
could pose a downside risk to the OLED food chain, including
Duksan Hi-Metal (UW V).