The manufacturing juggernaut that is China is the reason why we see an increasing number of device makers tipping their hat on the world stage, from Huawei to Xiaomi, Oppo to ZTE. Apple, with its Taiwan-based manufacturing partners, Foxconn and Pegatron, would not be able to sell the iPhone at the prices it already does were it not for large China-based workforces to assemble the goods.
The cheap labor is the reason why we see, “Made in China” stamped or engraved on nearly every consumer good sold en masse. Such developments were arguably economically unavoidable, but that does not make the results any less telling. Where there used to be swaths of high-quality electronics made in Japan, and a heavy manufacturing base in the United States, there is now a largely service-based economy and manufacturing firms simply cannot compete outside of highly-specialized areas.
Japan Display (JDI – a joint venture of Sony, Toshiba and Hitachi) and Sharp, two leading manufacturers of smartphone panels, found themselves in a situation where they had to adapt to the competition coming out of China from shops like TPV, Hisense, and Haier, or risk getting crushed.
According to industry sources in Taiwan, JDI and Sharp are getting into a price war on bids to smartphone manufacturers like ZTE, Huawei, and TCL (makers of Alcatel-branded mobile phones) who continue to expand their reach out of China and into other developing markets with ever increasing higher-quality smartphones. JDI and Sharp are aggressively courting the companies and have apparently scaled for production and have cut prices on TFT LCD panels for use in high-spec devices.
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