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China Briefings

Reports on China issued by Samsung Economic Research Institute

China Business Intelligence No. 101

China Business Intelligence No. 101

Samsung Economic Research Institute Beijing Office

Dec. 31, 2008

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Highlights:

I. Economy

The Taiwanese government has actively encouraged consolidation among the nation's DRAM manufacturers, as well as their relocation to China. However, government encouragement is expected to produce few tangible results since manufacturers have differing levels of technology and already maintain partnerships with foreign companies. At the same time, market uncertainty, technical advancement, and the strong performance of Korean companies have increased the pressure for consolidation among multinational companies. Since Taiwanese companies lack a step-by-step and integrated process, they have to secure global competitiveness through partnerships.

II. Industry

As the economy showed signs of slowing, Chinese TV makers adopted a strategic shift towards a low-priced strategy in urban markets, intensifying competition. After marketing linked to the Beijing Olympics ended in August 2008, local TV makers slashed prices. In response to the low-priced strategy from local companies, a host of foreign companies are releasing a string of new products. With higher competitiveness in large TVs, foreign makers are expected to be hurt more than their Chinese rivals by escalating price competition.

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