TV Sales Slump Amid Panel Price Hikes: What Are They Betting On?

Poor TV sales and rising panel prices are not contradictory. In the first half of the year, China's color TV sales were 12.49 million units, down 9.2% YoY, with replacement cycles lengthening. By early August, TV panel quotes were still rising, with monthly increases reportedly reaching 5%. Demand hasn't suddenly returned; it looks more like upstream players forcing a loss-making cycle back into profitability.

Over the past two weeks, I've used Excel to pull panel prices, sales volumes, and size structures. The more I pulled, the more it looked like watching cash flow repair in a capital-intensive industry. Panel makers' past issues were excessive capacity, homogeneous products, and price wars. TV manufacturers faced similar problems: losing volume if they didn't discount during promo seasons. Together, both sides dragged the industry below cash cost lines. Reports state that panel makers aim to push prices back above cash cost lines as soon as possible.

This statement basically explains the move. Whether they dare to raise prices depends on whether they have other choices. For panel makers, continuing low prices means losing money on every unit sold. Controlling production and raising prices at least keeps the financial statements alive.

Viewing the two routes side-by-side clarifies things. Panel makers pursue production control and price hikes, aiming to restore gross margins and cash flow via lower utilization rates and higher quotes. Constraints are hard: high depreciation, inventory writedowns. Risks are real: continued demand shrinkage, channel inventory buildup. OEMs pursue large-size upgrades, aiming to maintain average selling prices (ASP) and channel profits via pushing 65/75/85-inch screens, Mini LED, and high refresh rates. Constraints are long replacement cycles and volatile storage costs. Risks include failed price transmission and consumer rejection.

Actually, both sides are betting on the same thing: TVs won't revert to small sizes. Over the past three years, shipments of TVs 32 inches and below dropped by over 20% annually, and the sub-1000-yuan price segment has been almost abandoned. On the other hand, global LCD TV panel shipments rose over 10% in Q1 2025, with some sizes expected to rise further. Terminal sales look ugly, yet panels can still rise, partly because larger sizes consume more area. A 75-inch panel doesn't equal two 32-inch panels.

This is the technical basis for panel price hikes. TV popularity hasn't visibly rebounded, but structural changes support the price increase. Consumers buy fewer TVs, but when they do, they prefer bigger, brighter, and more expensive ones. Brand manufacturers use specs like Mini LED, high refresh rates, gaming low latency, and AI image quality to justify prices. Panel makers use capacity discipline to support quotes. One manages shipment area, the other manages inventory rhythm. It looks like collusion, but is actually a survival strategy in a cyclical industry.

China's record-low color TV sales don't mean there's no global TV supply. Omdia data shows global TV shipments grew 3.6% YoY in Q2. This aligns with rising panel shipments and brands stocking up early. Shortages in polarizers and rising storage costs made brands worry about future higher costs, leading them to pull goods early. Panel price hikes are sometimes driven by the supply chain, not necessarily synchronized with terminal demand.

However, this strategy has a ceiling. What the TV industry truly lacks is a reason to replace devices. Phones drive replacements because chips, cameras, and system experiences change yearly. TVs struggle with this.

For years, living room large screens have been background noise, not high-frequency devices. With the arrival of AI large models, TVs have the chance to become the display layer for home Agents, but this is still early. Many so-called "AI TVs" are just voice interfaces with a new coat of paint. I wrote last month about "Don't mistake marketing scripts for autonomy," and the situation here is similar. If AI cannot stably understand, execute, and reduce operational costs, price hikes will be hard for consumers to accept.

Panel makers know relying solely on TVs isn't enough. Materials mention domestic panel makers betting on glass substrate packaging, which is more noteworthy than simple price hikes. Glass substrate packaging involves a whole set of processes, including large-size glass, yield control, circuit precision, thermal stress, cutting, and cost curves. Application scenarios may expand from displays to sensors, automotive, AR, and robot interaction interfaces. Humanoid robots need motors and models, but also low-latency display, sensing, and feedback. If panel makers can migrate manufacturing capabilities from making TV screens to creating interfaces for the physical world, valuation logic will shift.

My judgment is neutral. Short term, panel price hikes are supply-side repairs; demand remains weak. Medium term, TV ASPs will be supported by large sizes and Mini LED, but sales volume growth will be hard to return to highs. Long term, the key is whether the display industry can move from home appliance panels to AI terminals, robot interfaces, and advanced packaging. Capital-intensive industries fear homogeneous price cuts the most, and lack of new demand the most.

Whether panel price hikes hold ultimately depends on whether TVs can transform from living room furniture back into high-frequency interactive entry points. The reason consumers replace TVs shifts from "cheaper" to "bigger, smarter, and longer-lasting." Behind this lies both industrial upgrading and cost pass-through.