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3 Continued growth in the LCD monitor segment is sustaining China s computer monitor industry. Driving both product development and manufacture, this sector is expected to retain its dominance of the mainstream supply for years to come. Leveraging their core advantages of light weight, compact housings and energy-saving features, LCD models accounted for 73 percent of the country s PC monitor exports in the first 10 months of 2008 with 92.8 million units shipped. Meanwhile, the volume of CRT variants that went to overseas clients reached only 34.8 million during the same period. The former s share of the market will remain on an upward trend as makers expand selections in coming months. China s emphasis on LCD monitors reflects worldwide trends. Data from isuppli indicates global production of such models topped 34 billion units in Output of CRT units hit only 4 billion, according to DisplaySearch. Although companies face slackening sales due to the current economic climate, many are confident export business will continue growing this year. More than half of the suppliers in this report project an upturn of 10 to 20 percent. While some will concentrate on domestic clients to reduce dependence on overseas markets, a rising number of makers are exploring new areas to expand buyer reach in step with efforts to bolster foreign trade. They will be broadening product lineups, shortening development periods and decreasing defect rates. These strategies will be complemented by sustained R&D initiatives and cost-management programs. The following are some of the key trends in China s computer monitor industry: Rising supply of larger LCD panels will boost the development and production of LCD monitors with screens 19in and bigger. CRT types will continue to be available but output will steadily decline in coming months as companies emphasize LCD models. Makers concentrate on OEM and ODM business, although a growing number of companies are establishing their own brands. To boost overseas business, suppliers are targeting new markets such as Africa while continuing expansions in Europe and Asia. Several will be reducing shipments to the US or concentrating on long-term clients there. Product development initiatives are moving toward additional TV and multimedia capability and enhanced housing designs. In addition to reducing power consumption, some makers will be adding HDMI or DisplayPort connectivity. Manufacturers are planning to increase capital expenditure in months ahead, with the majority eyeing a 20 to 50 percent adjustment. Price competition is one of the major challenges that companies in this industry face. Fluctuating material costs exacerbate the situation for many suppliers. This report covers LCD and CRT monitors. The supplier survey was conducted on manufacturers of these products. The Industry Overview section discusses developments in the different sectors, including makers strategies to survive current market challenges. It also mentions key trends and R&D priorities in coming months. The main manufacturing centers for computer monitors in China are the provinces of Guangdong and Jiangsu, in particular the cities of Shenzhen and Dongguan in the former and Kunshan and Suzhou in Jiangsu. To produce this report, Global Sources surveyed a wide range of suppliers. Rather than focus simply on high-profile makers, we compiled a representative sample of large, midsize and emerging manufacturers. All profiled companies are export-oriented professional suppliers that may or may not be clients of Global Sources. The selection of suppliers is designed to reflect the composition of the industry in China in terms of geographic spread, business type and company ownership. For in-depth company profiles, our research teams interviewed senior executives and export managers who discussed their recent performance and provided price, R&D, production and export forecasts for the next 12 months. The interviews were done in person, by phone or . In each case, companies were required to answer specific questions designed to verify their manufacturing and export credentials, including their production and export statistics, and a breakdown of exports by product type and market. Our production checklist details the product-specific manufacturing capability of each supplier. All profiled suppliers participated in a survey designed to provide insight into product and price trends, and challenges facing the industry. All survey questions are single choice. Results were calculated based on the actual number of valid responses to each question.

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5 China s computer monitor industry is riding on sustained momentum in the LCD sector, which has been driving product development and manufacture in recent years. The segment is expected to continue leading the mainstream, while CRT types will remain on the back burner of makers R&D priorities. Although several suppliers carry this variant to meet demand in emerging markets in Africa, the Middle East, Asia and Central and South America, output will not likely rise significantly in months ahead. Companies have a generally optimistic outlook despite the downturn in the overall computer industry. According to market research firm Gartner, global PC shipments totaled 67.2 million units in 1Q09, a 6.5 percent decline from the same period last year. Even so, makers in China are confident sales will rebound in the months nearing the Christmas season and boost overall margins. Momentum will also come from decreasing prices and expanding selections. Reductions in manufacturing costs resulting from the growing supply of panels and other components will likewise stimulate production. Much of the upturn will happen in the LCD monitor segment, whose market share is forecast to continue climbing. The line accounted for 73 percent of China s exports from January to October 2008 with 92.8 million units shipped, based on customs data. CRT models took up the rest with 34.8 million. Outbound shipments of LCD monitors rose 5 percent from January to August The growth rate is slower than previous years but is still indicative of positive movement as opposed to the CRT sector. Overseas trade of the latter during the same period reached 29 million units, a drop of 61 percent from Trends in China s computer monitor segment reflect the global market. Worldwide production of LCD types topped 34 billion units in 2008, according to market research and consulting firm isuppli. Data from DisplaySearch indicates output of CRT models totaled only 4 billion last year. One of the major challenges makers face is slackening sales, particularly in the US. Many project that narrowing margins could push smaller players out of the line and further thin China s already shrinking manufacturing base. To boost revenue and stay afloat, more companies are exploring other markets. They are setting their sights on new areas such as Africa while expanding reach in Europe and Asia. These are establishing branch offices in target destinations to facilitate overseas trade. Some are planning to reduce shipments to the US or concentrate on long-term clients there instead of widening buyer base. Still others, especially small and midsize operations, are boosting

6 China Greatwall supplies LCD and CRT monitors, which collectively account for 73 percent of the company s total sales. Revenue from the line totaled $378 million in Nearly half of sales came from exports. The suppplier ships 120,000 units to North America, the EU, non-eu countries, the Asia-Pacific region and the Middle East a month. Africa and Central and South America will be its main target markets in ODM clients absorb 90 percent of shipments, and the rest carry the maker s brand. The company conducts production in two factories in Guangdong province with a total area of 28,000sqm. Operations comply with ISO 9001:2000 and ISO The monthly capacity is 500,000 units but output currently averages 300,000 computer monitors a month. China Greatwall assigns 50 of its 4,068 employees to R&D. An 80- member team is in charge of QC. The company plans to increase annual capital expenditure by 50 percent. It expects export sales to grow by more than 20 percent in 2009.

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