Major Chinese display panel manufacturers like BOE and CSOT have started reducing their LCD output due to U.S. tariffs imposed during President Donald Trump’s administration, which impede exports to the American market, according to industry insiders.
As businesses shift their focus towards Europe and Asia, experts indicate that obtaining new clients swiftly continues to pose significant challenges. Added to this, the decrease in financial support from the Chinese government makes production reductions seem like the most feasible solution.
The pullback comes after years of aggressive price competition from Chinese firms in the global display market, particularly in the low-to-mid-end segment. The cutbacks could benefit South Korean display makers such as LG Display by easing oversupply pressures and supporting panel prices, analysts say.
The U.S. tariff barriers have compelled Chinese companies to reduce their focus on high-volume strategies within the lower-end LCD market,” stated Yi Choong-hoon, CEO of UBI Research. “Decreasing production is a anticipated step.
In recent years, Chinese firms have dominated the worldwide surplus of large-sized and IT-focused LCD panels. This shift could potentially benefit LG Display, as they face lesser exposure to U.S. tariffs and derive between 30% to 40% of their income from IT LCDs.
The diminished impact from Chinese companies might lead to better profit margins within the IT LCD sector,” stated an industry professional. “This could result in more stable or increased prices for larger LCD panels, potentially underscoring the competitive edge of bigger OLED panels.
Nevertheless, reducing China’s shipments of displays and completed electronic goods to the United States—one of the largest global markets—might lead to higher prices and decrease consumer purchasing power. Numerous Chinese plants act as end-assembly points for American companies like Apple, Dell, and HP. An extended trade dispute has the potential to reduce the desire for both electronic devices and screen panels.
Reduced production from Chinese display manufacturers might lead to higher TV prices,” Yi stated. “Should the U.S. market stay strong and Chinese companies continue facing barriers, this could provide significant gains for competitors. However, if the overall market shrinks, these advantages would likely be restricted.
The market research company Omdia predicts a persistent decrease in worldwide LCD deliveries for the current year, whereas OLED screens are anticipated to expand. The projection indicates an annual drop of 2.2% in the shipment of LCD television panels in 2025. In contrast, larger OLED panel distributions are forecasted to increase by 20.4% in terms of unit count and rise by 12.9% concerning surface area.