Chinese TV maker TCL (HKEx: 1070; Shenzhen: 000100) is making all the right moves these days, after its disastrous purchase of Thomson’s European and North American TV business a few years back. In the latest smart move for the company, in my view the sharpest of China’s major TV brands, TCL has signed Samsung (Seoul: 005930) up as a partner in its relatively state-of-the-art LCD plant in Shenzhen, with Samsung taking a 15 percent stake from one of the factory’s other partners (English report; Chinese report). As part of the package, Samsung — already the world’s top LCD maker — will also buy 2.55 million LCDs from the venture annually, or 15 percent of its output. This deal is great for TCL, not only bringing in a major new customer but also making sure the plant gets the cutting-edge technology it needs to keep up with other global leaders like LG Display (Seoul: 034220) and Chimei Innolux (Taipei: 3481). TCL already enjoys a solid reputation at home, and with this new partnership could finally start to make some serious inroads toward developing a name as a quality global brand, much the way that Samsung has done over the last 20 years.
Bottom line: TCL’s LCD tie-up with Samsung will give it a major boost towards becoming China’s first global quality TV brand.
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