With Foxconn Electronics flexing its muscle in the LCD contract manufacturing market, TPV Technology has looked to increase its presence throughout the supply chain. In addition to forming an LCD module joint venture with AU Optronics (AUO), it has established upstream LED operations with LED chipmakers Epistar and LED chip packaging house Everlight Electronics.

In 2010, LCD TV brand vendors will outsource more than 30% of their production, according to market analysts. TPV is expected to claim a 27% share of the LCD TV contract manufacturing market, followed by Foxconn at 15% in the second quarter and Turkey's Veste at 10%. A strong Japanese yen is also expected to encourage Japanese vendors to outsource even more, bringing the global percentage to 40% in 2011, the analysts said. Sony and Toshiba will outsource more than 70% of their TV production.

Sony embracing contract manufacturing, however, is not necessarily good news for TPV despite it being the market leader. Foxconn and Sony have been chummy production partners, and with the Chimei Innolux (CMI) merger earlier this year, Foxconn now has the first-tier vendor orders and complete production know-how to put up a good fight.

Compared with other IT products, LCD TV has a longer supply chain, and the end-use market is highly dependent on seasonal price wars and tax regulations in the different countries products are marketed. Hence, having TV assembly facilities within a local market, particularly for Europe, Brazil and India, is extremely advantageous. Both TPV and Foxconn have made inroads to these strategic markets to expand their operations in LED backlight, display monitors and TVs.