China’s LCD price hikes put pressure on Korean TV makers

Chinese liquid crystal display (LCD) panel makers are raising prices, potentially increasing production costs for Samsung Electronics Co. and LG Electronics Inc. as the Korean TV giants rely increasingly on Chinese suppliers.

According to display industry sources on Monday, BOE Technology Group Co., the world’s largest LCD panel maker, recently notified customers that it will raise display prices from the fourth quarter, citing higher raw material and supply chain costs.

TCL CSOT and HKC are also moving to raise prices.

The moves come after TV LCD panel prices fell in July and August before stabilizing in September. Industry observers say Chinese manufacturers are gaining greater pricing power after years of capacity expansion and low-price competition, with supply now concentrated among Chinese producers.

Samsung Display Co. and LG Display Co. exited large-size LCD production in 2022, leaving Samsung Electronics and LG Electronics increasingly dependent on suppliers such as BEO, TCL CSOT, and HKC.

Samsung Electronics is expected to source about 35.8 million TV LCD panels externally this year, including 4.4 million from BOE, double last year’s 2.2 million, according to Omdia. LG is believed to have an even higher dependence on BOE.

The impact could be significant as display panels account for 40 percent to 50 percent of a TV’s manufacturing cost, according to TrendForce. TV makers must decide whether to absorb higher panel costs or pass them on to consumers amid intense global price competition, sources said.

TrendForce expects major TV brands to increase panel purchases by 15 percent in the third quarter from the previous quarter ahead of the year-end shopping season.