China tightens its grip on the LCD panel market — Samsung and LG will have to pay more

Samsung, LG and other TV makers face rising costs just ahead of the peak year-end sales season. Chinese LCD panel manufacturers have already notified customers of price increases, highlighting how China’s dominance of the LCD display supply chain is translating into greater pricing power for local suppliers.

According to The Elec, BOE, TCL China Star Optoelectronics Technology (TCL CSOT) and HKC Display Technology have recently notified customers of LCD panel price adjustments. Samsung Electronics, LG Electronics and Sony are among the TV makers reported to have received the notices. BOE is expected to introduce the new prices in the fourth quarter, while TCL CSOT and HKC are raising prices for selected products from September.

The timing puts major TV brands in a difficult position. Samsung, LG and their rivals normally secure components and ramp up production from August through September to prepare for the Black Friday and Christmas shopping season. That makes it difficult for them to significantly reduce LCD purchases even as panel prices rise.

Notably, the increases are not being driven by a broad shortage of LCD manufacturing capacity. Some Chinese LCD fabs are reportedly operating at utilization rates of only around 70%. Rather than increasing output and putting more panels into the market, manufacturers appear to be limiting production, reducing the risk of oversupply and helping to support prices.

This strategy has become possible because the large-format LCD industry has consolidated around Chinese suppliers. According to market research firm Omdia, BOE, TCL CSOT and HKC form an oligopoly in the TV LCD panel market. Together, the three companies account for 70% to 85% of the market for 65-, 75- and 85-inch panels. Chinese manufacturers also supply almost all ultra-large TV LCD panels.

China built that position through years of capacity expansion and low-cost shipments. The resulting oversupply drove down LCD panel prices and weakened competitors in South Korea and Japan, many of which retreated from less-profitable LCD businesses. Samsung Display stopped producing LCD panels in 2022, while LG Display ended domestic TV LCD production and later sold its Guangzhou facility.

The latest increases do not necessarily mean TV prices will rise immediately. Samsung, LG and other brands may absorb part of the extra cost to maintain competitive holiday promotions. But the structural shift in the TV supply chain is clear: the Chinese companies that once helped make large LCD TVs cheaper now have a growing ability to protect margins by controlling output.