Omdia projects that major global TV manufacturers are preparing to replenish panel inventory in the third quarter of 2026, with quarterly procurement volumes expected to rise by 5%, thereby supporting fourth-quarter shipments—though risks persist. Second-quarter sell-through was fueled by aggressive promotions and panel price reductions, including market development funds (MDF). Whether TV makers commit to achieving second-half shipment targets, the outcomes of price negotiations with panel suppliers, and panel manufacturers' intentions to manage capacity utilization early in Q4 will all drive frequent adjustments to Q3 and Q4 procurement plans.

Unlike most consumer electronics and IT devices, display panels represent the most critical and costly component in television production. Omdia notes that the unprecedented memory crisis of 2026 is driving sharp price surges. While this impacts the TV industry, its effect is comparatively moderate relative to other product lines. Throughout 2026, display panel manufacturers are offering strategic support through price incentives and MDF, which helps alleviate the financial burden on TV makers' hardware operations and bolsters shipment volumes during this challenging year. This approach also enables panel suppliers to sustain relatively high fab utilization rates, allowing them to manage production costs competitively amid rising prices across various display components, while safeguarding industry competitiveness and market share. Even if memory prices escalate beyond expectations between Q2 and Q3 2026, TV manufacturers will find it difficult to pass sharply rising supply chain costs onto retailers before the end of Q3, owing to market competition and retailer strategies.

Global memory giants have recently indicated that the memory shortage will worsen further, with elevated prices persisting into 2027—a significant blow to computer and IT equipment manufacturers worldwide. This severe component crisis is forcing makers of smartphones, notebooks, and other devices to make aggressive adjustments, whether through higher retail prices, reduced hardware specifications, or sacrificed gross margins. Otherwise, the CE and IT equipment industries are expected to undergo major transformation. Display panels have consistently been the largest single cost source in television production, accounting for 60% to 70% of the total bill of materials (BOM), depending on size, specifications, and brand. Omdia projects that in the second half of 2026, mainboard costs for smaller LCD TVs—such as 32-inch HD and 40-inch HD models—will for the first time surpass display module costs. Although panel module prices for 43-inch and larger LCD TVs remain higher than mainboard costs, the gap has narrowed significantly year-over-year. In this context, TV makers must accelerate their shift toward larger, higher-end products to better manage the memory cost share within their TV BOMs.

Despite the memory shortage and global tech crisis looming over the industry, the TV sector is demonstrating greater resilience than other consumer electronics and IT devices. TVs not only carry the highest display cost weight, but platform-driven TV operating systems are reshaping the value chain by injecting high-margin and recurring subscription revenue into an otherwise loss-making hardware market—though benefits vary across manufacturers. Omdia expects that despite ongoing supply chain and cost challenges, demand for large-size TV display panels will remain relatively stable this year and next. For panel makers, this is a critical moment to reassess the long-term competitiveness of TV brands and select appropriate partners to navigate market changes together.

TV makers will reduce demand in Q2 2026, with Q3 demand projected to grow 5% quarter-over-quarter. Driven by seasonal promotions in the US market and sporting events, first-half 2026 demand exceeded expectations. Given that some demand may have been pulled forward, supply chain participants expect global TV shipments in the second half of 2026 to remain stable or decline slightly. However, despite persistent Q2 losses and rising memory prices—with Q3 expected to bring even more severe losses—major global TV brands and OEMs still intend to maintain their 2026 business plans. Q3 panel price negotiations, memory price trends, confidence in second-half shipment targets, and panel makers' intentions to control capacity utilization early in Q4 will all prompt TV brands to adjust their Q3 procurement strategies.

In Q2 2026, most Chinese TV manufacturers' panel procurement came in below expectations, or close to the low base of Q1. This is because Chinese TV makers reduced panel demand in June, particularly for smaller display panels, driven by several factors. Panel price negotiations for Q3 effectively began as early as June. Like other TV brands, leading Chinese manufacturers are grappling with the ripple effects of skyrocketing supply chain costs triggered by the memory crisis. They have had to recalibrate panel procurement strategies in response to rapidly rising memory costs. TV makers are leveraging procurement volumes as bargaining chips in negotiations with panel suppliers, aiming to secure lower panel prices and MDF to ease financial strain and support market operations. Chinese TV makers, particularly Hisense, took the lead in slowing panel purchases in June, opting to wait until Q3 to rebuild inventory. Price negotiations, including MDF, have become pivotal in shaping TV brands' Q3 procurement plans. China's Q2 promotional events, including the 618 shopping festival, have concluded but fell short of expectations. The Chinese TV market remains in a structural slowdown, with overall sales and display area declining during the recent 618 period—only the 85-inch and above segment is expected to achieve 10% year-over-year growth in 2026.

In Q3 2026, major global TV manufacturers plan to increase panel procurement by 5% quarter-over-quarter, which will support Q4 TV shipments, albeit with associated risks. Q2 TV sales performance, Q3 panel price negotiations, memory price trends, confidence in second-half shipment targets, and panel makers' capacity utilization control intentions early in Q4 will all drive TV brands to adjust their Q3 procurement plans. US and Chinese TV market sales show divergent performance. Promotions in the US market during May and June 2026, including Walmart rollbacks and Amazon Prime Day, drove June shipment growth, with US market expected to grow 4% year-over-year in the first half of 2026. However, TV sales during China's 618 shopping festival posted negative growth, with shipments declining double digits year-over-year. Overall, Q2 US market TV sales effectively cleared inventory.

By the end of Q2, TV makers' inventory levels are healthy, and Q3 panel procurement plans show upside potential. According to Omdia's estimates, Chinese and Korean TV makers ended Q2 with healthy inventory levels, which should normalize early in Q3. If they are satisfied with panel price negotiations, Q3 procurement increases have upside potential. Korean TV makers cut panel demand in Q2 and are now planning to increase purchases in Q3. However, Chinese TV makers have become more cautious in procuring panels for Q3, with some companies scaling back plans, mainly for 50-inch and smaller models. Omdia expects that as Chinese TV makers' inventory returns to normal levels in July and August, if some are satisfied with panel prices or anticipate a price floor, they may strategically procure more panels in late Q3 or Q4. Additionally, some panel makers may control supply by reducing capacity utilization in late Q3 or early Q4, during the National Day Golden Week period. If TV makers believe prices have bottomed and panel supply will be controlled, this could prompt some to build panel inventory.

Global TV makers are not immune to the impact of rising memory prices. Omdia estimates that even leading TV brands will face cost increases of at least $50 to $60 per unit in Q3 2026 compared to the second half of 2025 and early 2026. Therefore, strategic support from panel makers to TV brands is critical for sustaining seasonal demand. In Q3 2026, mainboard prices for small LCD TVs—including TV SoC, DDR, and eMMC—will historically exceed display module prices for the first time. This forces TV makers to accelerate the production shift from small and medium-sized models to larger, higher-end models to manage memory costs within the TV BOM. To meet TV makers' demand for large and ultra-large display panels, panel suppliers are offering lower panel prices, including MDF, to support strategic TV brands and drive Q3 shipments.

As memory prices continue to rise and retailers remain resistant to price increases, TV makers' losses are mounting, and confidence in producing more TVs in the second half is declining. No global TV maker is immune to the effects of rising memory prices, not even major brands with strong bargaining power. Consequently, TV makers are urgently seeking cost savings on key display panels, demanding greater price concessions from panel suppliers to encourage increased shipments in the second half. After consuming low-cost inventory from the first half, TV makers will face high-cost inventory and worry about the impact of TV price increases on market demand. Amid these adverse market conditions, Chinese TV makers in Q3 2026 face two options: sell at relatively higher prices, risking slower market sales and rising inventory, or continue prioritizing market share while absorbing increased costs themselves.

Omdia points out that a key risk facing the TV display industry is that second-half consumer demand may fall below expectations, as some purchases anticipated for the second half may have been pulled forward to the first half. Additionally, average selling prices (ASP) for TVs may rise starting in 2027, or Q4 promotions may be reduced—both of which would dampen market demand. Maintaining overall TV shipment volumes is crucial, as platform models inject diversified revenue streams into the value chain. Platform-driven TV operating systems are reshaping the value chain by injecting high-margin and recurring revenue into a loss-making hardware market. Omdia believes TV makers can monetize platform businesses and increase average revenue per user (ARPU) through three primary methods: FAST (free ad-supported streaming TV) advertising, revenue sharing from streaming subscriptions, and branded remote control button placement fees. Figure 3 shows estimated ARPU for major TV platform owners and TV makers. Omdia expects that major global TV platform companies will continue to focus on their proprietary platform businesses to generate more profit, while maintaining TV shipment volumes remains critical. Strategic alliances among TV makers, TV platforms, and retail media networks are driving the next wave of growth in the emerging "shoppable TV" ecosystem. This will enhance ARPU and contribute profits to specific supply chain participants within this new TV value chain.