The fluctuation in LCD panel prices has significantly impacted downstream TV manufacturers, causing a lot of stress in the industry. A year-long price surge in LCD panels led to financial strain for many TV brands, but with the second half of this year, panel prices began to stabilize and have recently dropped sharply. This shift raises the question: is it finally time for home appliance manufacturers to see some relief?
Unlike the white goods market, color TV companies have struggled in recent years. According to a report from the Ministry of Industry and Information Technology, total color TV production in the first half of 2024 fell by 6.4% year-on-year to 74.23 million units, while LCD TV output dropped even more, down 8.5% to 69.62 million units.
This trend is also reflected in the performance of major listed home appliance companies. Sichuan Changhong reported first-half revenue of 34.76 billion yuan, up 6.07% compared to the previous year, but net profit plummeted by 66.55% to just 150 million yuan. Hisense Electric saw a slight 2.09% increase in revenue to 13.567 billion yuan, yet its net profit dropped by 46.55% to 3.96 billion yuan. Shenzhen Konka A also faced challenges, with a revenue of 11.406 billion yuan and a net profit of only 30.871 million yuan, with non-deductible losses further highlighting the difficulties in its core business.
Hisense admitted in its semi-annual report that global TV demand remained weak in the first half of the year. A key factor behind the industry downturn was the sharp rise in LCD panel prices since last year, which pushed up overall TV prices and suppressed consumer spending. This created significant pressure on company operations.
In contrast, LCD panel manufacturers have benefited greatly from the price increases. BOE’s first-half net profit surged by nine times year-on-year, while Huaxing Optoelectronics, a subsidiary of TCL Group, also saw strong growth, with its net profit rising by 110.8%.
Major panel makers are also expanding their production capacity. Companies like BOE, China Star Optoelectronics, and Hon Hai have invested heavily in building new 10.5-generation and 11-generation LCD production lines in recent years.
With the expansion of panel production, LCD prices began to ease in June. By late August and early September, panel prices experienced a sharp decline across all sizes.
However, this drop is not entirely positive for TV manufacturers. Some industry analysts believe that the falling panel prices will give TV brands some breathing room, and while current TV prices are stable, there's a high chance of small price cuts in the near future.
Some internet TV brands have already started a price war. Xiaomi announced on September 1 that it would lower the prices of certain models, signaling an early move to challenge traditional TV pricing.
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