[Edaily Reporter JAEMIN SONG ] While global demand for TVs remains sluggish, the manufacturing costs of liquid crystal display (LCD) panels are actually rising. This is due to price increases for display glass substrates, as well as rising prices for key components such as printed circuit boards (PCBs) and display driver chips (DDIs). As Chinese panel manufacturers pass on these higher costs to panel prices while simultaneously cutting production, the TV businesses of SamsungElectronics and LGELECTRONICS—which rely heavily on Chinese-made LCD panels—are expected to face growing pressure.

According to the display industry on the 29th, Corning, a U.S.-based global display glass substrate manufacturer, will raise the price of display glass substrates traded in yen by more than 15% worldwide starting in the fourth quarter. Corning cited rising costs for raw materials, precious metals, energy, and logistics as the reasons for the price adjustment. In addition, Chinese panel manufacturer HKC recently announced a price increase, citing rising procurement costs for key components and materials such as driver ICs, PCBs, and glass substrates. As price pressures spread from glass substrates to key components, the manufacturing costs of LCD panels are also rising accordingly.

This cost pressure is also reflected in the numbers. Market research firm TrendForce forecasts that the manufacturing cost of LCD panels for TVs in the fourth quarter of this year will rise by 4–7% compared to the previous quarter. Conversely, demand for TV panels during the same period is expected to decline by 4% compared to the previous quarter. While a decline in demand typically increases downward pressure on panel prices, rising costs appear to be acting as a factor limiting price declines in this instance.

Expanding investment in artificial intelligence (AI) servers is also contributing to the rise in costs. As demand for servers in AI data centers surges, production capacity for components such as PCBs and driver ICs is being prioritized for high-value-added server products. Analysts note that because AI servers and TV panels share some parts of the supply chain, the price burden for related components is actually increasing despite sluggish TV demand.

These higher costs are also being reflected in panel prices. Major Chinese panel manufacturers—including BOE, TCL CSOT, and HKC—have raised prices for TV LCD panels in the fourth quarter. HKC cited rising procurement costs for key components and materials, such as driver ICs, PCBs, and glass substrates, as the reason for the price adjustment. This move reflects an effort to pass on rising manufacturing costs to prices despite declining panel demand.

Along with price hikes, supply adjustments are also gaining momentum. Due to production cuts by major Chinese panel manufacturers, the average utilization rate of global production lines for Generation 5 and higher panels is projected to fall to 79.6% in October, down 4.2 percentage points from the previous month. Chinese manufacturers such as BOE, TCL CSOT, and HKC account for approximately 70% of the global supply of LCD panels for TVs. If these companies continue to cut production, the supply of panels will decrease in tandem with the decline in demand, potentially limiting the extent of price declines.

This poses a challenge for SamsungElectronics and LGELECTRONICS. Since the end of domestic large-size LCD panel production, both companies have been sourcing a significant portion of their TV LCD panels from Chinese manufacturers such as BOE, TCL CSOT, and HKC. With TV demand sluggish, it is difficult for them to raise the prices of finished products to pass on the increased costs to consumers. With rising prices for components and materials compounded by price hikes and production cuts from Chinese panel manufacturers, the upward pressure on panel procurement costs in the fourth quarter is increasingly likely to squeeze the profitability of the TV business.

An industry official stated, “Even with TV demand remaining weak, rising component and material prices are increasing the cost burden on panel manufacturers,” adding, “If this is compounded by production cuts by Chinese manufacturers, TV manufacturers may continue to face the burden of higher panel procurement costs for the foreseeable future.”