According to a recent analysis, the first quarter of 2026 saw robust demand for display panels. This trend was partly fueled by the release of pent-up demand following a drop in TV panel prices to a two-year low in the fourth quarter of 2025.

However, panel prices began to rise again in Q1 2026. This was driven by strong demand, the Chinese New Year holiday in February, preparations for the FIFA World Cup, and tariff uncertainty related to potential adjustments to the US-Mexico-Canada Agreement (USMCA).

Buoyed by this strong demand, panel manufacturers have maintained high utilization rates, a trend expected to continue into the second quarter of 2026. The industry, however, faces potential risks from a demand pullback due to adverse external factors.

Geopolitical instability from the Iran conflict and the resulting inflationary pressures could negatively impact TV market demand. Concurrently, the booming AI ecosystem is driving rapid price increases for memory and other key components, prompting TV manufacturers to raise their average selling prices (ASP).

While these price hikes help mitigate cost pressures, they may also suppress market demand. If TV makers cannot successfully pass on the rising supply chain costs to retailers and consumers, they could face greater profit pressure in Q2 2026.

Industry participants are currently focused on end-sales performance during the World Cup in June-July. This period is seen as a critical benchmark for evaluating and adjusting TV panel procurement plans.

However, TV manufacturers may struggle to match the promotional intensity of major retailers in May-June, such as Wal-Mart's "Rollback" and Amazon.com's Prime Day events. Competition among U.S. retail giants and European distributors has intensified in recent years, while price competition between TV brands and OEMs remains fierce.

This two-way price competition partially offsets the supply chain cost increases from soaring memory prices, keeping low-priced TV products widely available in the market. For instance, Wal-Mart's Rollback promotion in May 2026 offered 30%–50% discounts on TVs.

Such steep discounts could pressure TV brands and OEMs, who aim to pass on supply chain costs through higher prices, while retailers often push this price pressure onto consumers. Major retailers and leading TV manufacturers may not generate significant profits from TV hardware, with some potentially incurring losses due to fierce competition with Chinese brands.

Some companies with proprietary TV platforms or access to platform subsidies can offset hardware losses with platform business profits. This allows them to maintain low-price promotional strategies to compete for market share and traffic.

Nevertheless, in the current uncertain external and competitive environment, the survival space for low-end retailers and TV manufacturers is being increasingly squeezed.

Outlook for TV Demand in the Second Half of 2026

In early Q2 or Q3 2026, as inventory clears and the aforementioned promotions end, display supply chain participants will face more direct challenges. Key indicators for H2 2026 will be TV sales performance during the promotional cycle and whether manufacturers can pass on some cost increases without harming demand.

If the May-July promotions by major retailers successfully drive traffic and meet targets, the risk of a sharp decline in TV panel demand in Q3 2026 would be mitigated, though some structural adjustments may still occur. In this scenario, TV makers would replenish panel inventory in Q3 for seasonal promotional demand in Q4.

The risk in this scenario is that consumer demand in H2 2026 may be weaker than expected. Some TV purchases planned for H2 may have been pulled forward into H1. Additionally, sustained high or further rising ASPs due to ongoing supply chain cost increases could suppress demand.

Persistent geopolitical conflicts pushing up energy prices and stubborn inflation will also significantly constrain consumer spending in H2 2026. If the May-July promotions fail to drive sufficient traffic or TV makers cannot clear inventory as planned, they will be forced to cut panel orders by late June or early Q3.

Failure to do so risks both missed sales targets and worsening financial losses. In this case, inventory replenishment in Q3 and Q4 would be more conservative.

Notably, while TV brands are quoting higher prices to retailers and some leading brands have raised sticker prices for 2026 models globally, retailer and consumer focus remains on promotional products, primarily older 2025 models.

This means any overall ASP increase has limited practical impact for device makers, as low-priced older models still dominate market traffic. Consequently, 2026 TV models will likely face further price pressure in H2.

Retailer Promotions and Market Dynamics

Wal-Mart's Rollbacks cut TV prices by 30%–50%, while Amazon.com moved Prime Day from July to June in 2026. Rollback promotions are time-limited price reductions on specific items, typically deeper than regular low-price strategies, and are often marked with "Was/Now" tags.

These promotions aim to combat inflation, boost sales, increase store traffic, and reinforce the retailer's low-price positioning. Current Rollback prices for some 65-inch and 75-inch TVs are near last year's Black Friday lows, with even steeper discounts on larger sizes.

These aggressive price strategies contradict TV manufacturers' expectations, as they urgently need to pass on rising supply chain costs globally to alleviate financial pressure. However, they have long anticipated that fierce market competition would make this goal difficult to achieve.

Recent business negotiations show that in March 2026, U.S. retailers agreed to TV makers' price increase requests to reflect unprecedented memory cost surges. TV makers must provide 60-90 days' notice for price hikes, followed by further negotiation.

Retail giants plan to maintain low-price strategies for their own TV brands in 2026. With memory chip price hikes, per-unit TV costs are estimated to have risen 30%–50% or more. In April 2026, TV makers negotiated with retailers to share half the memory cost increase burden.

However, market competition will likely force brands and OEMs to absorb most of the new costs, while retailers may shoulder some and pass it to the market, pushing up ASPs. Despite higher quoted prices and increased sticker prices for 2026 models, the market focus on promotional 2025 models limits the real-world impact of ASP increases.

Deeper Discounts on Large-Screen TVs

During Wal-Mart's Rollback, discounts on large and extra-large screen TVs were more pronounced. From a TV manufacturing cost management perspective, this is understandable. The unprecedented surge in memory prices is putting sustained pressure on the entire supply chain.

TV manufacturers need to shift towards larger sizes and higher-end product structures to better manage the cost proportion of memory in the TV's Bill of Materials (BOM). For example, the mainboard cost for a 55-inch UHD Google Smart TV is projected to constitute 31% of the total BOM in Q2 2026, up from just 12% a year ago.

Similarly, the audio/video processing board cost for a 75-inch UHD Smart TV is expected to rise to 20% of the BOM in Q2 2026, a significant increase from 8% the previous year. For a 32-inch HD Smart TV, this cost proportion is set to climb to 37% in Q2 2026, compared to 13% in the same period of 2025.

Following Wal-Mart's May Rollback, Amazon.com officially announced its Prime Day event would return in June 2026 across 26 countries, earlier than the traditional July timing. The 2026 Prime Day is crucial for the TV display supply chain, as many global brands participate.

In 2025, Prime Day's total online sales significantly surpassed Black Friday, partly because Amazon extended the summer promotion from two to four days. Although the exact 2026 dates are not yet announced, they are expected in late June.