Television may cost 10% more as prices of open cells continue to increase

Consumers may have to shell out more to buy television panels because prices of open cells continue to increase while manufacturers have reduced production.

The industry has been facing this issue after the pandemic and open-cell prices have gone up 20 per cent since December and television-panel manufacturers expect another 15 per cent increase to kick in towards the end of February, after the Chinese New Year.

Also, manufacturers expect a demand-supply imbalance because of the production cut.

The open cell, one of the main components in manufacturing television sets, accounts for 60-65 per cent of the production cost. Also, the main component is manufactured by four or five companies in China, due to which pricing power remains in their hands.

While open cell prices rose last year in August, they came off later.

Though the decision on the price hike rests with manufacturers, a retailer said both small- and large-screen television panels were expected to see an increase in prices, but that largely depended on how manufacturers passed on to buyers the cost increase.

The retailer said some manufacturers might pass it on in a staggered manner as they also sit on some amount of inventories.

“Open-cell prices are increasing month to month and there is a demand and supply situation again. Manufacturers have decided to cut production. Therefore, they will increase prices. There will be a huge spike in large sizes and in smaller sizes also. On the final product, there can be an increase of a minimum of 10 per cent in February and March,” Avneet Singh Marwah, director and chief executive officer, Super Plastronics, a Kodak brand licensee, told Business Standard.

Videotex, another contract manufacturer of television panels, plans to increase prices by 5-10 per cent.

“The industry is dealing with a notable increase in open-cell pricing, which has been a recurring issue, especially after the Covid-19 pandemic. The recent price hike is because open-cell manufacturers curtailed production, resulting in a 20-40 per cent increase, depending on sizes. The prices are still going up, and we’re unsure how much more they’ll rise,” said Arjun Bajaj, director at Videotex.

Despite challenges, “we manage well due to strong relationships with suppliers and solid collaborations with brands. We’re getting ready with enough inventories to keep the supply chain running smoothly”, he said.