Author: Rita

Tide Guide Reading

J.P. Morgan's monthly panel pricing report shows that in June, the average price of LCD TV panels remained flat month-on-month, but this "flat" is hiding a collective shift from TV manufacturers: from resisting price increases to actively cutting orders. Both high-end small-size and ultra-large size panels are facing price pressure, with a projected decline of -1.6% in July. As the world's largest supplier of LCD glass substrates, Corning's display business is facing the risk of structural loss of pricing power.

Price Stagnation: Better Than Expected or The Eve of Decline

The average price of LCD TV panels in June was flat month-on-month, which seems "flat," but this is actually better than historical seasonality. Historically, the average decline from May to June is -0.9%, but prices held steady this year. There is no confidence behind this, only a buildup of pressure.

Year-on-year, panel prices fell by 4.7% in June, marking the 15th consecutive month of year-on-year decline. This indicates that the entire panel industry is in a long-term oversupply environment. A month-on-month decline of 1.6% is expected in July, close to the historical average of -1.4%, but analysts believe this is just the beginning.

A turning point has emerged. The attitude of TV manufacturers has shifted from "reluctantly accepting" to "actively reversing." J.P. Morgan's statement is straightforward: TV manufacturers have shifted from resisting price increases to actively seeking concessions, demanding direct price cuts or obtaining market development funds (MDF) to offset losses in their TV business. This shift from passive resistance to active order cutting suggests that TV manufacturers have given up on the idea of covering costs through price hikes and instead chosen to adjust quantities.

Why Are TV Manufacturers Cutting Orders?

Pressure is coming from multiple directions simultaneously. Inflation in memory costs is pushing up the BOM costs of televisions, and rising prices of DRAM and NAND have directly increased the overall product cost. Weak consumer demand has led retailers to be unwilling to raise prices, instead launching various promotions. Geopolitical uncertainties have reduced purchasing confidence. The threefold pressure has severely compressed the profit margins of TV manufacturers.

Under this tripartite pressure, some Chinese and South Korean TV manufacturers have made extreme choices: cutting panel procurement plans for Q2 2026. A decrease in procurement volume means that panel manufacturers need to lower capacity utilization to balance supply, thus abandoning pricing power.

Panel manufacturers are forced into a "supply management" mode. They have lowered capacity utilization in June and July to control supply and defend pricing leverage. But this is a passive defense, as actual demand has already shrunk.

Size Differentiation: Small Screens Have Become Waste, Large Screens Are Also Declining

Data tells the story best. LCD TV panels smaller than 49 inches were flat month-on-month in June and also flat year-on-year. Historically, this size segment has averaged a decline of 1.4% from May to June, but this year, it did not decline but remained unchanged. However, more crucially, this size segment is experiencing the most severe demand collapse.

Mid-to-low-end TV brands and unbranded manufacturers are significantly cutting orders. They produce small-sized TVs, and rising memory costs hit them hardest, as low-end TVs already have very thin profit margins. They cannot raise prices to retailers and can only reduce volume.

Panels larger than 49 inches fared slightly better. They were flat month-on-month in June, but fell by 5.9% year-on-year. This indicates that at least prices are still being maintained, although volumes are also declining. J.P. Morgan points out that top TV brands are accelerating their shift to larger, higher-end models, trying to offset the impact of rising memory costs with higher profits from larger screens.

But this is merely delaying the inevitable. In Q3 2026, large and ultra-large size panels will face a new round of downward pressure. The reason is quite practical: this is a crucial period for global brands and OEMs competing for orders for the 4Q26 seasonal promotions. To secure large orders, they will exchange larger panel procurement volumes for lower prices.

Will the Promotional Season Save the Situation?

The key variable is whether promotions in Q2 2026 can clear inventory. Walmart price cuts, Amazon Prime Day, China's 618, and the FIFA World Cup season are all major promotion opportunities for Q2 2026. If inventory can be cleared, there is an opportunity to stabilize demand in the second half of the year. If not, the effect of pull-forward purchases will fade, and consumers may become more sensitive to price hikes for TVs, potentially worsening demand in the second half of the year.

Analysts are monitoring the core issue: can TV manufacturers pull back ASP (average selling price) through promotions in Q4 2026 without further eroding demand? Currently, this probability is decreasing.

Corning in a Tight Spot

From Corning's perspective, what is the direct implication of this report? Corning manufactures the glass substrates used in LCD screens. Worldwide, 97% of viewing area is covered by LCD displays, with TV screens accounting for over 70%. Corning's display business makes a significant contribution to the group's profits.

When panel pricing no longer rises, and panel manufacturers are forced to lower capacity while TV manufacturers begin cutting orders, the pricing power of the entire supply chain is descending. Panel manufacturers will pressure upstream material suppliers for lower prices, and as a glass substrate supplier, Corning has almost no bargaining power. Costs cannot be passed on to downstream, and with volumes shrinking, profit margins are inevitably under pressure.

Worse still, if demand truly enters a recession mode in the second half of the year, Corning's display business will also directly shrink. Although the neutral rating does not explicitly state this, the report hints at this risk. The loss of pricing power means that Corning cannot enjoy volume growth nor receive compensation for price.

This also explains why analysts' tones are becoming increasingly cautious. The "flat" pricing in June is merely a facade; the shrinkage of underlying demand is the core issue.

Disclaimer

This article is a compilation and interpretation of third-party brokerage research reports by Tide Research. The views, ratings, and related judgments quoted in the text are solely those of J.P. Morgan analysts and represent the positions of their respective institutions, not the views of Tide Research, and do not constitute any investment advice.

When reading, please note three points: first, the report's content is based on historical pricing data and existing order information, and future pricing trends are influenced by multiple factors and contain uncertainties. Second, sell-side research reports are naturally optimistic, and some covered companies have a relationship with the brokerage in investment banking. Third, the value of research reports lies in their main logical thread and premise assumptions, rather than any single data point. Look at the logic, not just the prices.

The market is risky, and decisions should be made independently. This article should not serve as the basis for buying or selling any securities.

Data source: Omdia panel price data · J.P. Morgan research report (Joseph Cardoso et al., June 25, 2026)

Tide Research · June 2026