The fluctuation in LCD panel prices has significantly impacted the nerves of downstream TV manufacturers. After a nearly year-long surge in panel prices, many TV makers faced tough times. However, things have started to change in the second half of this year—LCD panel prices have eased and dropped sharply recently. Does this signal a turning point for home appliance manufacturers, bringing long-awaited relief?
Unlike the white goods market, color TV companies have struggled with weak performance in recent years. According to a report from the Ministry of Industry and Information Technology, total color TV production in the first half of this year reached 74.23 million units, down 6.4% compared to the same period last year. Meanwhile, LCD TV output was 69.62 million units, a decrease of 8.5% year-on-year.
This trend is also reflected in the financial results of some major listed home appliance companies. Sichuan Changhong reported first-half revenue of 34.76 billion yuan, up 6.07% year-on-year, but net profit only reached 150 million yuan—a sharp drop of 66.55%. Hisense Electric saw its revenue rise slightly to 13.567 billion yuan, a 2.09% increase, yet net profit fell by 46.55% to 3.96 billion yuan. Shenzhen Konka A had revenue of 11.406 billion yuan, but its net profit was just 30.871 million yuan, with non-deductible losses even more severe, indicating that its core business is suffering.
Hisense Electric acknowledged in its semi-annual report that global TV demand was sluggish in the first half of the year. A key factor behind the industry downturn was the sharp rise in key component prices, particularly LCD panels, which pushed up overall TV prices. This led to suppressed consumer demand and put immense pressure on the company's operations.
In contrast, LCD panel manufacturers have benefited greatly from the price increases. BOE A’s first-half net profit surged ninefold year-on-year, while TCL Group’s Huaxing Optoelectronics also performed well, with its listed companies reporting an 110.8% increase in net profit.
Meanwhile, major panel makers are actively expanding their production capacity. BOE, China Star Optoelectronics, and Hon Hai Group have all invested in building new 10.5-generation or 11-generation LCD production lines in recent years.
With increased production, LCD panel prices began to ease in June. By late August and September, panel prices dropped significantly across all sizes. However, this is not necessarily good news for TV manufacturers. Some industry analysts believe that the decline in panel prices will give TV products some breathing room, and although current market prices have stabilized, there is 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, taking the lead in pushing down color TV prices.
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