How to survive the challenging display landscape?

Deborah Yang

Practice Leader, Display

Pillar 1: Assessing risks

Regional display
market risk assessment

One of the key topics for the display industry in 2026 is how to manage the unfavorable external environment, which is expected to influence global market demand to some extent and cause drastic changes in the competitive landscape for consumer electronics (CE) and information technology (IT) device makers. Questions have arisen about whether supply chain participants can pass on rising supply chain costs to the market without hurting demand. The answer is disappointing for device makers but not necessarily the same for component makers, such as display and chipset makers.

Displays are one of the most critical and costly elements of CE and IT products. Since 2017, supply chain participants have navigated an unprecedented series of disruptions: the US–China trade war during the Trump administration's first term, the 2020 pandemic, conflicts in Eastern Europe and the Middle East, the reciprocal trade tariff wars during the Trump Administration's second term in 2025, and most recently, an unprecedented memory crisis that has driven skyrocketing price increases since early 2026.

In addition, the 2026 conflict in Iran has severely disrupted oil supplies, causing prices to surge and sparking widespread fears of global stagflation and recession. All these events have disturbed the display industry on both the supply and demand side.

In early 2023, a monopolistic LCD TV display industry emerged. Following the withdrawal or defocus of Korean display makers from LCD production, LCD TV supply became dominated by three major Chinese panel makers, now accounting for about 70% of LCD TV display supply in the world. The monopoly power on the supply of LCD TV displays gave Chinese panel makers a chance to turn around their finances and gain fruitful profits through the adoption of production-to-order to push up LCD TV panel prices.

However, there has been little chance to increase the TV prices in the market, and TV makers have either absorbed the rising supply chain costs or opted to reduce the quantity of products they manufacture. Moving into 2026, TV makers are desperate to turn around their finances; otherwise, they will struggle to survive.

Pillar 2: Identifying opportunities

While the display industry is happy to see bigger display sizes, better picture quality, and different display form factors through continued display tech innovations and advanced display fab manufacturing, its biggest challenge is that the major application products, especially TV average selling prices (ASPs), continue to fall. This has led to unbalanced margin distribution across the TV display supply chain.

When display makers enjoyed a 15–25% profit margin on LCD TV panels, TV makers, especially leading Korean and Japanese TV brands, suffered deficits of 2–5% in 2025. The unbalanced margin distribution across the TV display supply chain turned into a crisis for TV makers in 2025, and the situation is set to become more serious in 2026 when TV makers not only have to manage the tariff risks but also deal with the unprecedented memory crisis.

All these factors are forcing TV makers to reset their business strategies. With Sony instructing TCL to manage the TV business and Panasonic entering its brand licensing agreement with Skyworth, it signals that 2026 will be a year of survival for TV makers. Joint ventures in brand licensing and the acquisition of TV makers are expected to take place in the future.

A shakeout is expected across the TV industry for those with weaker bargaining power in the supply chain or with less competitiveness in the end market. Component makers, especially display manufacturers, must identify viable long-term partners to navigate unfavorable market conditions.

This means that display makers that gained big profits from LCD TV panels must offer strategic support to their preferred customers through market development funds to secure volume and ensure their fabs can run at competitive levels, important for panel makers to protect market share and secure reasonable profits.

What is the biggest challenge facing TV makers?

Falling TV average selling prices (ASPs)
Unbalanced margin distribution in the supply chain
Tariff risks and memory crisis pressures

Display market
opportunity identification

Pillar 3: Implementing strategies

Moving into 2026, TV makers are still unable to shake off the fear of the tariff crisis that emerged a year ago. Meanwhile, they face an even bigger challenge: an unprecedented memory chip shortage that is turning into a crisis for the global technology industry and is expected to persist throughout 2026.

TV makers have invested in and built large TV display manufacturing facilities in Mexico since 2025, and they are projecting production to reach over 55 million units in 2026, which can fully meet the demand of 50 million units in the North American market. As of the end of 2025, 85% of TVs in the US were imported from Mexico due to the zero-tariff benefits provided by the United States-Mexico-Canada Agreement (USMCA). It is believed TV makers will not shift their TV manufacturing back to Vietnam or China from their current mass production in Mexico unless there are changes to the USMCA in 2026.

TV mainboard costs now account for 30% of the TV bill of materials (BOM) in Q2 2026, up from 12% last year. To manage memory cost share in the TV BOM, TV makers need to shift to larger and premium products. This shift toward large and ultra-large TV displays fits well with panel makers' product strategies and can improve panel makers' profits.

Costs of 65-/75-inch LCD TV panels fell sharply after Gen 10.5 fab depreciation in 2025. Panel makers may share this cost saving with strategic TV clients to boost demand in 2026 to ensure their display fabs run at the competitive utilization rates.

Display sourcing
strategy implementation

With 2026 being a year of survival for TV makers, it is also a year for panel makers to reset business strategies and team up with business allies. For display makers, it is no longer about controlling the supply to push up display prices but preventing display prices from falling, as demand correction could happen. The stabilization of display prices is important, but offering strategic financial support to customers is more important for longer-term business sustainability.

The insights in this chapter ‘How to survive the challenging display landscape?’ is derived from:

Deborah Yang
Practice Leader