[Edaily Reporter JAEMIN SONG ] With SamsungElectronics and LGELECTRONICS relying heavily on Chinese manufacturers for a significant portion of their LCD panels for TVs, panel manufacturing costs are projected to rise through next year. As Chinese manufacturers push for panel price increases, citing cost pressures, the profitability of domestic TV manufacturers is also expected to come under greater strain.

According to market research firm Omdia on the 9th, the cash cost of open-cell panels for 65-inch LCD TVs is projected to rise from $112 last year to $116.8 this year and $124.55 next year. Following a 4% year-over-year increase this year, an additional 6.6% rise is expected next year, bringing the cumulative increase over the two-year period to approximately 11.2%.

An open-cell is the core component of an LCD panel, excluding the backlight and other parts. Cash cost refers to the actual costs incurred in manufacturing, excluding depreciation and other expenses. Omdia analyzed that while the depreciation burden on panel manufacturers is decreasing, cash costs are actually rising due to higher prices for components and materials.

The main factors behind the cost increases are cited as competition for the supply of electronic components driven by the expansion of the artificial intelligence (AI) industry and rising international oil prices. According to Omdia’s estimates for component price increases in the fourth quarter of this year, printed circuit boards (PCBs) are expected to rise by 15–20%, timing controllers (T-cons) with built-in memory by 25–30%, and glass substrates by 10–15%. Rising prices of petrochemical raw materials used in polarizing films and optical films are also adding to the cost burden.

The issue is that domestic TV manufacturers could be directly affected by price hikes from Chinese panel makers. Since Samsung Display and LG Display withdrew from the production of LCDs for large-screen TVs, the global LCD supply chain has been restructured around Chinese companies.

According to Omdia, Chinese panel manufacturers account for 70–85% of the 65–85-inch LCD TV panel market. SamsungElectronics’ purchases of panels from China’s BOE this year are also projected to reach approximately 4.4 million units, double last year’s level. As the supply share of Chinese manufacturers increases, the pressure on domestic TV manufacturers to negotiate prices inevitably grows.

In fact, major Chinese panel manufacturers such as BOE, TCL CSOT, and HKC have already notified their clients of plans to raise prices, citing rising production costs. Omdia predicts that since these companies are curbing oversupply by adjusting production line utilization rates, the price increases for LCD TV open-cell panels will be reflected in actual transactions by this coming December.

From the perspective of SamsungElectronics and LGELECTRONICS, if panel prices rise amid sluggish global TV demand, securing profitability could become even more difficult. Although they are responding by expanding premium TV sales and diversifying their supply chains, analysts note that it is not easy to fully pass on the increased costs to product prices.

An industry official stated, “Given that domestic TV manufacturers have become increasingly dependent on Chinese-made LCD panels, price hikes by Chinese manufacturers will inevitably lead to higher cost burdens.” The official added, “As the recovery in TV market demand is slow, it will be difficult to pass on the full cost of rising panel prices to product prices, making profitability management even more critical.”