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Home appliances

Samsung, LG see largest surge in TV prices in decade

Samsung Electronics, LG Electronics hike prices by 23% and 19.5%, respectively, in H1

By Sep 03, 2021 (Gmt+09:00)

An LG Electronics’ salesperson discusses products with customers at one of LGE's home appliance shops in Seoul
An LG Electronics’ salesperson discusses products with customers at one of LGE's home appliance shops in Seoul

Lee Ji-eun, a 30-year-old bride-to-be, was surprised at the prices of liquid-crystal display (LCD) TVs when she visited a home appliance store in Seoul recently, as they were about 20% higher than earlier this year. Prices of 55-inch LCD TVs in South Korea have risen to around 1.5 million won ($1,295.9) of late, from about 1.2 million won in January and February.

“I delayed the purchase until the last minute before my wedding since I heard TV prices usually fall. But they have soared,” Lee complained.

TV prices of Samsung Electronics Co. and LG Electronics Inc. have reported their largest increases in a decade on the rising costs of chips and LCD panels.

The average selling price of TVs advanced about 20% in the first half from a year earlier, according to regulatory filings by TV producers on Sept. 3. Samsung raised prices by 23% from last year’s level and LG increased theirs by 19.5%.

RISING PANEL, CHIP COSTS

TV prices have been showing a downward trend since 2011, except during the LCD panel supercycle in 2017 when they rose around 10%. The industry lost momentum after 2017 as Chinese companies ramped up their LCD panel production. Prices of 55-inch LCD panels fell from about $140 in early 2019 to around $100 by November of that year.

But LCD panel prices rebounded on pent-up consumption in the COVID-19 era with 55-inch panel prices reaching $228 in July 2021 from $178 at the end of 2020, lifting TV prices.

“Prices of display panels for TVs and monitors surged about 66% from a year earlier,” Samsung said in its half-year earnings statement.

TV prices found further support as chip prices increased 20-30% on-year due to supply disruptions. TV producers are known to face difficulties in securing Display Driver ICs (DDICs) for LCD TVs due to soaring demand.

FURTHER RISES EXPECTED

The electronics industry expects TV prices to rise further, despite a dip in LCD panel prices in August, since TV factories in some countries such as Vietnam were shut often due to COVID-19, slashing supply.

TV makers plan to focus more on premium products with higher margins, supporting overall TV prices, in a move to reduce uncertainty related to pent-up demand.

Retailers have already started on such a strategy. They are now trying harder to sell organic light-emitting diode (OLED) TVs than they are LCD TVs given the shrinking price differential between the two types due to rising LCD TV prices.

“The price differential between OLED TVs and LCD TVs has narrowed to around 200,000 won recently,” said a local electronics store manager. “It has become much easier to persuade customers to buy OLED TVs.”

Write to Sin-Young Park at nyusos@hankyung.com

Jongwoo Cheon edited this article.

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