Consumers may have to shell out more to buy TV panels because open cell prices continue to rise while manufacturers have scaled back production.
The industry has been facing this problem after the pandemic and open cell prices have increased by 20 percent since December and television panel manufacturers expect another 15 percent increase to occur towards the end of February, after of the Chinese New Year.
In addition, manufacturers expect an imbalance between supply and demand due to production cuts.
The open cell, one of the main components in television manufacturing, accounts for 60 to 65 percent of the production cost. Additionally, the main component is made by four or five companies in China, so the pricing power remains in their hands.
While open cell prices rose last year in August, they fell later.
Although the decision on price increases rests with manufacturers, one retailer said small and large screen TV panels were expected to see a price increase, but that largely depended on how manufacturers passed on the price increase. costs to buyers.
The retailer said some manufacturers could transfer it in a staggered manner as they also have a certain amount of inventories.
“The prices of open cells increase month by month and again there is a supply and demand situation. Manufacturers have decided to cut production. Therefore, prices will increase. There will be a big increase in large sizes and also in smaller sizes. In the final product, there may be an increase of a minimum of 10 per cent in February and March,” Avneet Singh Marwah, director and chief executive officer of Super Plastronics, licensee of the Kodak brand, told Business Standard.
Videotex, another outsourced television panel manufacturer, plans to increase prices by 5 to 10 percent.
“The industry is facing a notable increase in open cell prices, which has been a recurring issue, especially after the Covid-19 pandemic. The recent price increase is due to open cell manufacturers reducing production, resulting in a 20 to 40 percent increase, depending on size. Prices keep going up and we are not sure how much more they will go up,” said Arjun Bajaj, director, Videotex.
Despite the challenges, “we manage well thanks to strong relationships with suppliers and strong collaborations with brands. “We are preparing with sufficient inventories to keep the supply chain running smoothly,” he stated.
First published: January 28, 2024 | 21:03 IS