With 10 consecutive months of decline, LCD panel prices not only dropped 57% from the peak, but also hit a new low in 2 and a half years. So, as LCD panel prices continue to fall, who is the big winner for companies in the color TV industry chain?
Qiao Hua||Written by
In the past 618 promotion, Hisense , Huawei , Xiaomi , Changhong, TCL and other color TV companies once again started a round of price wars. Among them, the Honor Smart Screen 455-inch is only 1,299 yuan, the Hisense 75-inch is only 3,088 yuan, the Konka 32-inch is only 579 yuan, and the TCL 65-inch is only 1,879 yuan.
Behind this round of color TV price wars, it is precisely the price of LCD panels, which are the core components of LCD TVs, that has seen a continuous decline. Among them, the price of 55-inch LCD TV panels, which is the main selling model in the color TV market, dropped by 8% again in May 2022 compared with April, and dropped by 57% compared with the price in May 2021.
Smart Home Appliances learned that in addition to 55-inch, the prices of different LCD panels including 32-inch, 65-inch, and even 98-inch have been falling for 10 consecutive months, hitting a price low in nearly 2 years. As the two major color TV giants , Samsung, and LG continue to cut orders and reduce production, this round of falling LCD panel prices still shows no sign of stopping. During this period, although BOE and TCL Huaxing have been saying that LCD panel prices have dropped to the bottom, color TV complete machine companies from the downstream have continued to reduce production and cut orders, causing LCD panel prices to fall all the way.
So in this round of falling LCD panel prices, who will be the biggest winner? Obviously, as LCD panel suppliers, BOE and TCL Huaxing must be the biggest "injured". On the one hand, the lower supply price of their LCD panels will inevitably lead to lower corporate operating profits. At the same time, the reduction in downstream purchases will inevitably lead to slower production line efficiency and overcapacity.
Similarly, for color TV companies, although the price reduction of LCD panels will increase the profit margin of the company within a certain period. However, in the face of sluggish demand in the first-tier color TV market, many color TV companies have taken the lead in lowering prices to grab orders in the first-tier market since the beginning of this year due to the speed and space of LCD panel price cuts. It is hoped that price reduction will activate more user demand. But judging from the past 618 sales, the effect is not obvious. Moreover, many color TV companies have to reduce production and control prices.
So, will the color TV dealers in the terminal market become the winners? Many color TV dealers bluntly stated that due to sluggish demand, the color TVs in stock in March and April this year could not be sold. After June, the value of the inventory dropped by more than half. As long as the sales are not popular and the color TV inventory exceeds one month, the dealer will face losses.
As a result, in this round of LCD TV panel price cuts caused by sluggish end market demand, all companies in the industry chain will ultimately be losers. Consumers may be the ultimate winners, but if consumption remains sluggish, it will be difficult for color TV companies and merchants to guarantee product quality and services to users.
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