Background: The Growing Challenge from Chinese Manufacturers
China has become a significant player in the LCD display and television markets, presenting substantial challenges for South Korean TV manufacturers Samsung Electronics and LG Electronics. The restructuring of the LCD panel supply chain led by China has rapidly eroded the bargaining power of these two South Korean companies when it comes to raw material prices. Furthermore, the rise of Mini LED technology is accelerating China’s efforts to penetrate the high-end television market.

Q3 Financial Report Highlights: Rising Costs for Samsung and LG
In their third-quarter financial reports released on November 17, Samsung Electronics and LG Electronics revealed substantial increases in the procurement costs of display panels for their TV businesses.
Samsung Electronics reported that its panel procurement costs surged to 5.9019 trillion KRW ($4.5 billion), up from 4.3764 trillion KRW ($3.3 billion) a year earlier—an increase of over 1.5 trillion KRW ($1.1 billion). The share of procurement costs in overall business revenue rose from 8.8% in Q3 last year to 11.2% in Q3 this year. On a quarterly basis, the amount spent on panels grew from 1.9091 trillion KRW ($1.4 billion) in Q1 to over 2 trillion KRW ($1.5 billion) in Q3, continuing its upward trend. Samsung also noted an 11% price increase in panels for TVs and monitors compared to the same period last year.

LG Electronics similarly reported a rise in procurement costs for LCD modules, which climbed from 2.4557 trillion KRW ($1.8 billion) to 3.0070 trillion KRW ($2.3 billion). The share of procurement costs in overall business revenue increased from 38.9% to 42.4% this year. Both Samsung and LG source their LCD panels from Chinese suppliers like BOE and CSOT.

The Price Struggles and the Impact of Chinese Control
While the global demand for LCD monitors has remained sluggish due to a weak IT market, Chinese manufacturers have managed to keep panel prices stable through artificial capacity control. According to DSCC, the capacity utilization rate for Chinese LCD panel factories increased from 77% in Q1 to 85% in Q2 but fell slightly to 84% in Q3. This trend is expected to continue into Q4, with some factories reducing operating days from the usual 1-2 days during the National Day holiday to 1-2 weeks this year. As a result, the utilization rate in Q4 is expected to drop to 78%, down from 85% in Q3.
The Effect of Production Cuts
These measures will likely lead to a price drop only in January next year. DSCC analysts have stated that Chinese companies are sending a clear signal that they will continue to control panel supply through production cuts, maintaining higher prices for a longer period.
China’s ability to control prices is further enhanced by the exit of competitors like South Korea and Japan from the LCD display market. In September, LG Display sold its Guangzhou LCD factory to CSOT, officially exiting the large-size LCD panel business. Meanwhile, Sharp ceased production of large-size LCD panels. Although AUO continues to operate in the LCD market, its smaller scale means it cannot significantly shift the market dynamics.
The Shift in Market Share: A Rise of Chinese TV Manufacturers
The reduced price competitiveness of South Korean companies has led to the rise of Chinese manufacturers in the TV market. Chinese TV makers are securing their price competitiveness by establishing a vertically integrated system for both panels and TVs. Additionally, Chinese companies are expanding their high-end business through Mini LED and QD-LCD products, based on LCD technology.
For instance, TCL has increased sales of large-screen TVs over 80 inches by purchasing relatively cheap LCD panels from its subsidiary CSOT. Both Samsung Electronics and LG Electronics have long used their affiliates to purchase panels in bulk, a strategy that is now being emulated by Chinese firms.

Market Share Changes: Samsung and LG Lose Ground to Chinese Competitors
This shift is evident in the market share data. According to Counterpoint Research, in Q3 this year, Samsung‘s share of the high-end TV market (by shipments) plummeted from 43% (ranking 1st) last year to 30% (ranking 1st) this year. LG Electronics also saw its market share drop from 20% (ranking 2nd) last year to 16% (ranking 4th) this year.
At the same time, Hisense saw its market share grow from 14% to 24% (ranking 2nd), while TCL‘s market share increased from 11% to 17% (ranking 3rd). The year-on-year increase in Mini LED TV shipments produced primarily by Chinese companies was 102%, surpassing the growth in OLED TVs produced by South Korean companies. The production of QD-LCD products in China also rose by more than 50%.
Future Outlook: Increasing Pressure on Samsung and LG
An industry insider from South Korea noted, “Domestic companies are at a disadvantage in TV panel price negotiations because they have no alternative supply chain. There’s a worst-case scenario where the Chinese government continues to push LCD panel prices up.” As Q4 progresses, the capacity utilization rate of Chinese LCD panel factories is expected to further decline, which could exacerbate the challenges faced by South Korean TV manufacturers. Market trends indicate that Chinese companies will continue leveraging their control over the supply chain to maintain high prices, increasing pressure on competitors like Samsung Electronics and LG Electronics.
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