Innolux is continuing to see steady shipments of mid-range Ultra HD TV panels, with supply going mostly to customers in China, according to industry sources.

The company has seen increased competition from panel makers in Korea and China in the entry-level Ultra HD TV panel segment, and saw its overall share in the Ultra HD TV panel segment decrease to 36% in July while both Samsung Display and LG Display saw their shares exceed 20%.

Innolux has since readjusted its product mix and is aiming at more China-based vendors who are looking to push mid-range products into the China market, as well as into markets abroad in order to maintain shipments, the sources said.

The company is expected to be the number one supplier of Ultra HD TV panels in 2014 but may face challenges, as China-based makers are further entering the segment, holding roughly a 15% share of shipments during July. That number is likely to continue increasing as China's panel makers further integrate with local supply chains and improve technology.

The sources also said they expect Ultra HD TV shipments in 2014 reach higher end estimates at around 20 million.