TCL Technology's net profit doubled last year, but the panel industry still needs to face the challenge of rising raw material prices.

Last year, the downstream consumer electronics industry rebounded and drove panel makers’ performance growth; this year, the industry will face a new challenge of rising raw material prices.

On the evening of March 27, TCL Technology (000100.SZ) released its 2025 financial report. Last year, the company’s revenue was CNY 184.06 billion, up 11.7% year over year, and its net profit was CNY 4.52 billion, up 188.8%. In the semiconductor display field, TCL Huaxing’s revenue was CNY 105.24 billion, up 17.4%, and its net profit was CNY 8.01 billion, up 44.4%. Its businesses also include TCL Electronics (01070.HK), which released earnings for the television terminal on the same day. Last year, the company’s revenue was HKD 114.583 billion, up 15.4% year over year, and its net profit was HKD 2.495 billion, up 41.8% year over year. The company’s display business revenue increased 9.2% year over year to HKD 75.797 billion.

TCL Technology’s products include OLED (organic light-emitting diodes) and LCD (liquid crystal), among others. Some domestic display-panel companies that had already released financial reports or earnings forecasts also saw improved performance last year. Focusing on the mid-to-small display sector, Tianma A (000050.SZ) reported that last year its revenue was CNY 36.227 billion, up 8.16%, while its net profit was CNY 167 million, turning from a loss to a profit year over year. The company’s products include OLED and MicroLED; Visionox (002387.SZ), which is expected to have last year’s revenue in the range of CNY 7.9 billion to CNY 8.3 billion, remained broadly flat year over year or saw slight growth, and its net profit is expected to increase slightly.

All of the above panel makers mentioned that demand in the industry rebounded last year. TCL Technology said that last year, driven by the rollout of consumer subsidy policies and the trend toward larger product sizes, display-area demand grew steadily. New emerging application areas such as automotive displays and professional displays saw particularly significant growth. In particular, the shipment volume of smartphone panels increased 29% year over year, and the shipment area of automotive displays increased 61% year over year.

Tianma A said that during the reporting period, the mid-to-small-size display sector showed a recovery trend. Visionox said that last year, as the downstream consumer electronics industry recovered, the penetration rate in the AMOLED market for smartphones and smart wearables increased. TCL Electronics also felt changes in display-terminal demand, saying that last year global TV industry demand remained stable and brand concentration further increased, and that users favored products that are intelligent, mid-to-high-end, and large-screen.

But this year, panel manufacturers are also facing new challenges. Tianma A’s financial report stated that the display market has recently been hit by the impact of rising prices for memory chips and some other electronic components, along with tight supply. TrendForce analyst Hu Jiarong told reporters that as memory prices rise, the cost share of memory materials in TV complete sets has increased. For 32-inch products, the memory share increased from 6% at the beginning of last year to 25% recently. In other raw materials, suppliers of PCB, POL, PMMA, DDIC, and other materials have also notified panel makers of price increases, which may raise panel manufacturers’ production costs by at least 4%~5%.

However, the impact of raw material price increases differs across product types. Previously, TCL Technology’s senior vice president and TCL Huaxing CEO Zhao Jun told reporters that the product most affected by memory would likely be small-size mobile communication smartphones, whose demand for OLED displays may face some pressure in the short term.

And beyond small-size smartphone OLED panels, the industry expects other categories to have growth opportunities. Zhao Jun said that for large-size panel businesses represented by TVs and commercial displays, performance is expected to remain relatively stable, and growth in mid-size businesses such as IT and automotive displays can also offset the impact of memory price increases to a large extent.

In the downstream TV terminal market, analysts believe large manufacturers have strong capacity to withstand pressure. Hu Jiarong said that some white-label TV manufacturers began reducing their plans for 32-inch products, and some third- and fourth-tier contract manufacturers have also stopped production recently. By contrast, major large-screen TV makers can respond to market changes through adjustments to product combinations. New challenges test manufacturers’ production capabilities; this year, the “the bigger the better” trend in the TV manufacturers’ landscape is expected to be even more evident.

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