​Sanan Optoelectronics (600703.CH) completed a private equity sale of $1.13b US to be used to increase the capital of the company’s Mini/Micro LED project in Hubei province.  The project has turned profitable according to the company as of September of this year on a net basis and the company feels the expansion is warranted.  The shares were purchased by a number of institutions, some state-owned, and are locked in for 6 months.  The project was originally announced in 2019 with a 3-year construction window and a production goal of one year after construction was completed, although there have been reports that Sanan had been producing production samples in March of this year.
Sanan has signed agreements with Samsung (005930.KS) for the supply of Mini-LEDs, likely being used for watch displays, a JV with Chinastar (pvt) for Mini-Micro-LED R&D, and has been  approved as a supplier to Apple (AAPL), so the company has a legitimate reason for raising capital to expand production, at least from a customer perspective, although Apple has also been working with Epistar (3714.TT) and automotive lighting specialist AMS OSRAM (pvt) for a number of years on various Mini-LED and Micro-LED projects.  We expect the latest capital raise is Sanan’s push to become the dominant volume supplier to Apple, and Apple is certainly one to encourage additional capacity investment from suppliers.
The Mini-LED market is a relatively new one and is still evolving and while we expect the Mini-LED market, which is an adjunct to LCD displays, to grow steadily over the next few years particularly for high-end LCD displays, we see such vast differences in estimates and forecasts for the Mini-LED space (estimates range from $39m to $174m for 2020 and from $81m to $411m for 2021), that it seems a bit problematic when it comes to evaluate such diverse forecasts without knowing what is included.  The same goes for longer-term forecasts, which vary even more greatly out in the 2027 – 2030 timeframe, and the prospects for Micro-LED, which, in theory, would compete with LCD and self-emissive displays, are even more tenuous.  Sanan, already a major LED producer, is among other Chinese LED producers who have been investing is Mini-LED capacity this year, including $717m from Jiangxi Zhaochi Semiconductor (pvt), a similar capacity increase from Xiamen Changelight (300102.CH) and a 289m investment in HC Semitek (300323.CH) by China’s leading LCD display producer BOE (200725.CH), with these firms also looking to become major Mini-LED suppliers as the market develops.

As we have been doing since May of 2021, we check pricing on Samsung’s (005920.KS) Mini-LED/QD and QD only TVs to map how macro, seasonal, and holidays affect pricing on this category, particularly as it is a relatively new category and one toward the high-end of the TV pricing.  We have also been tracking Samsung’s QD/OLED TV pricing since it appeared in May of this year, an even more distinct product type that only Samsung Display (pvt) is able to produce currently.  While we don’t check prices for all on a regular schedule, we try to work toward specific events or holidays, and with Black Friday only two days away, we thought it helpful to see whether Samsung is being naughty or nice to its high-end TV customers.
2021 Models
As Samsung is slowly disengaging from its 2021 line, no longer offering 2021 8K Mini-LED/QD sets (900A & 800A series) on its website, along with eliminating one of last year’s Mini-LED/QD 4K series (85A) and one quantum dot only series (80A), Samsung has thinned last year’s models, but seems to have little rhyme or reason as to how they are pricing the remaining 2021 Mini-LED/QD 4K line over the last three weeks.  They did cut the price of last year’s massive 98” Mini-LED/QD 4K TV from $15,000 to $13,000 (↓13.3%), which they have only done one other time (during the July 4th holiday) this year, and reduced prices on all but one of last year’s Mini-LED/QD 4K sets, putting 4 of the 5 Mini-LED/QD 4K sets from last year at their lowest price points since their initial release last year.  Samsung lowered prices on 3 of the 13 2021 quantum dot only 4K sets (70A & 60A), putting 5 in that group at their lowest ever price and one (55” 4K QD only) at its highest price.  Overall, on all the remaining Samsung 2021 Mini-LED/QD and QD only sets, prices declined by 3.9% since our last check on 10/31.
2022 Models
Samsung was a bit more aggressive with pricing on this year’s models but seems to have abandon promoting its 8K Mini-LED/QD line (900B & 800B) whose prices have remained flat over the last month.  As we have previously noted, there are issues with 8K sets in Europe starting in March of 2023, data suggests that 8K sets have been poor sellers so far this year, and the macro environment is less conducive to such high-priced models that offer little image improvement give the lack of 8K content, so there seems to be little incentive for Samsung to discount the sets, other than to dump stale inventory in the retail channel. 
That said, Samsung cut prices substantially on high-end Mini-LED/QD sets (95B), with 3 of the 4 in that line dropping by between 20.0% and 44.4% and putting that group down 48.9% from their initial prices set in May.  Samsung also lowered prices between 5.2% and 11.1% on the lower-priced quantum dot only line (60B), leaving most of the remaining lines flat for the period.  On an overall basis, Samsung cut prices across this year’s 8K and 4K Mini-LED/QD and QD only lines by 5.3% for the period, putting the entire 2022 line down 33.8% from initial prices set 224 days ago. 
However Samsung seems to set price declines during the year more in order to reach a specific price point for the holiday season than to stimulate sales for a particular holiday, as model pricing for this year’s line reached the same dollar price point at Black Friday as last year, despite a lower initial price.  This puts the onus on manufacturing to maintain margins by lowering costs at the same rate as set prices reductions.  We expect this was a difficult task this year but not an impossible one, as panel prices declined while semiconductor and other component prices increased early in the year.  That said, component costs are a bit better now, so there is some hope that manufacturing could lower costs enough to maintain margins, but that leaves little wiggle room on prices if Samsung wants to move excess TV set inventory. 
QD/OLED
Samsung’s QD/OLED TV line, which consists of a 65” and a 55” model, continues to see price declines, now down 27.6% from its initial price for the 65” models and a decline of 32.4% for the 55” model, based on Amazon (AMZN) pricing.  As this is the first year such sets are available there is no comparative data, which means Samsung is flying blind with pricing and is competing against Sony (SNE), whose QD/OLED set prices remains at their original list price of $2,499 (55”) and $2,999 (65”).  Samsung seems far more willing to find a price point that consumers find attractive than Sony, and prices for both models on Amazon, as shown in Figure 3, are close to the discounts that Samsung has offered on its company site. 
The QD/OLED TV product comes at a difficult time given the macro concerns that are troubling large economies across the globe, but Samsung seems willing to test its price elasticity despite the weak environment.  Samsung does have a considerable stake in the success of the product considering affiliate Samsung Display has chosen it as their step toward a mass produced OLED TV and eliminated its LCD TV panel production capacity, but the limited production capacity that is currently available to SDC is not enough for parent Samsung to make it a cornerstone of its premium TV line.  This leads to a decision by Samsung as to whether they are willing to commit to QD/OLED and ok the SDC funding to build additional QD/OLED capacity, which needs to be made relatively soon if that capacity is not to miss the 2023 holiday season.  We see the discounting as a necessary step toward enhancing Samsung’s understanding of consumer response to QD/OLED and moving the decision-making process forward.
While this has been a disappointing year for TV set sales, especially against the economic backdrop, we are a bit more optimistic about 2023 in that we expect component pricing to continue to decline and TV panel prices to be more stable than this year.  That said, consumer buying power is declining so it is hard to find an impetus for a demand driven scenario in 2023, but we expect at least a more stable TV market, making it a bit easier for those who need to make billion-dollar decisions about capacity.  We are keeping our expectations low, but the glass seems slightly more full than empty, with the emphasis on slightly.

As we have been tracking TV set pricing for Samsung’s (005930.KS) 8K and 4K Mini-LED/QD and QD only sets since their release in May of last year, along with this year’s models, we can get a good picture as to where Samsung set pricing is relative to premium TV set pricing.
Samsung has eliminated a number of last year’s models from its website, particularly the top-end (900 series) 8K mini-LED/QD sets, (the 85” model had a price of $5,000 on our last check) some 4K mini-LED/QD sets (85A) and some quantum dot only sets (80A).  Most are still available on Amazon (AMZN) and a few other sites, but at much higher prices than where they ended on Samsung’s site.  More importantly, there was relatively little discounting on the remaining 2021 models over the last month or so.
That was not the case with the 2022 models, where discounting heading into November was very heavy.  The six 8K min-LED/QD sets offered this year saw a 15.7% drop over the last 55 days (9/9 to current), the 12 4K mini-LED/QD sets saw a 12.3% decline, and the QD only sets (2022 only) saw an 8.7% decline, while all 4K sets combined saw a 10.7% decline, and the value of the 2022 sets on a price/in2 of surface declined by 39.4% so far this year.
This puts 33 of the 36 sets in the 2022 mini-LED/QD or QD only line at their lowest point this year, with the 3 that are not at their lowest point all being 98” sets that have remained at $15,000 since they were released.  Looking at Figure 1, it is obvious that TV set price reductions have begun earlier this year than last and while this year’s year-end prices might be closer together than current prices would indicate, we expect they will be lower given the economic situation this year. 
With Black Friday only 25 days away, we expect Samsung to continue to offer more aggressive discounts this year to entice customers who are facing a much weaker economic scenario than last year.  The TV space overall has already been facing a difficult year as we have noted in the past, but while brand shipment/production expectations have declined as the year progressed, primarily in the 2nd half, more recent cuts seem to indicate that TV brands have come to a point where they have to choose between reducing prices to gain unit volume or trying to maintain margins on lower unit sales.  Samsung has recently cut its shipment/production expectations by ~12.5%, and given that they are the largest TV set producer globally, we expect they are indicative of what other brands are contemplating.  If we were to apply the same reduction that Samsung recently made and applied it to all of the other brands, the result would be shown in Figure 2 ‘current column.  Note that some brands will not see cuts that large while others will see worse, so the ‘current’ column is an illustration, not an estimate.  We expect actual 4Q results to be modestly better than shown.

Given that the headlines over the Labor Day weekend were abounding with comments on the discounts available due to overstocked items in the CE space and beyond, and that the shortages and transportation bottlenecks are rapidly ending, we thought it appropriate to check Samsung’s (005930.KS) Mini-LED/QD Tv pricing to see if such discounts were apparent in that TV space.
While it was only 22 days since we last checked prices, it turns out there was a bit more price movement than we might have expected, although we know the inventory situation in the TV space overall entered the period at a higher than normal level.  There was considerable disparity between Samsung’s 2021 TV line[1] and the new 2022 line.  In terms of price movement, only 5 sets in the 2021 line saw a decrease in price, while 25 saw price declines in the 2022 line, indicating in which model years the excess inventory was held.  Further, the average period decline for the 2021 line was -0.5% while the average period decline for the 2022 line was 6.3%. 
More telling is the fact that the average decline from the original release price for the 2021 line was 27.6% while the average price decline from the original price for the 2022 line was 21.8% but the 2021 decline took place over 474 days, while the 2022 decline took place over 146 days, a rate of decline almost twice as fast as last year..   While we hesitate to speculate on where that would put 2022 Mini-LED/QD TV prices by next year, with 17 2022 models at their lowest price since release and only 10 at their lowest out of last year’s line, the trend toward lower Mini-LED/QD and QD only TVs seems set, at least into the holidays.
All in, it seems Samsung is certainly a bit more aggressive as to pricing for its Mini-LED/QD line this year, and with offerings from TCL (000100.CH), LG Electronics (066570.KS), Sony (SNE), Philips (pvt), Konka (000016.CH), Huawei (pvt) and Hisense (600060.CH) either available or announced this year, as opposed to Samsung, TCL, and LG last year, it is not surprising that Samsung is competing a bit more aggressively this year.  To get an idea of the competition and range of prices we put together a list of currently available Mini-LED TVs and prices.  We note that we cannot certify that all models shown have Mini-LED and quantum dots and we not that all models vary as to other features.


[1] Our data includes only Samsung’s Mini-LED/QD and QD Only TV lines and does not include Samsung’s generic LCD TVs.

As we have noted, TV brands have cut orders in order to reduce excessive inventory levels, particularly as inflation reduces consumer demand.  While tracking the price of the hundreds of TV models available to consumers, we have been tracking the pricing of Samsung’s (005930.KS) Mini-LED/QD TV lines both this year and last year in order to see how Samsung reacts to seasonality, macro events, and inventory management.  As the TV sets in this line encompass prices ranging from $15,000 to $450, it gives an indication as to the general tone of premium to mid-range TV pricing.  While we don’t check pricing on a set schedule, as holidays and events play an important part in TV pricing, most of the intervals are between 3 and 4 weeks so charts look relatively normal, and our data today is just over 1 month from our last check.
Discounting to move inventory was not Samsung’s theme over the last month, as on an overall basis prices on all 2022 Mini-LED/QD and QD only models increased by 1.8%, while 2021 models saw a 2.0% increase.  2022 8K models saw an unusual price increase of 7.0%, after a drop to their lowest price point last month, while last year’s 8K models saw little change.  2022 4K Mini/QD models saw a 3.0% price increase with 2021 models jumping 5.7% and this year’s QD only sets saw a 2.1% price decrease (the only category that saw a decrease), while last year’s QD only sets saw a small (0.2%) price increase.  8 of this year’s models were at their lowest price of the year while 2 were at their highest, while 16 of last year’s models were at their lowest price and 4 at their highest.
All in, we expect Samsung was more concerned with margins than moving inventory during the last few weeks, albeit contrary to expectations, and pushed prices back up to previous levels after a short July 4 discounting period.  Figure 1 shows the four general categories across the line and how 2021 and 2022 pricing has changed, while Figure 2 shifts the 2022 models back in time to compare new model price changes to the same time period last year, which shows how 2022 model pricing has progressed relative to last year.  We note that 2022 4K Mini-LED/QD pricing includes 4 models that did not exist in the 2021 line, making average set pricing higher this year although the price pattern is similar.

Samsung Electronics has been wrestling with smartphone inventory issues, with ~18.5% of the company’s recently revised smartphone shipment targets already in distributor’s hands, considerably above the standard 10% to 12% usually held.  Much of the inventory is the Galaxy A series (2022 models range in price from ~$182 - $525), which has sold poorly this year, which Samsung Display had been producing aggressively early this year before parent Samsung Electronics lowered their shipment target from 310m units to between 270m and 280m.
But the increase in inflation and overall uncertainty over the war in Ukraine has made consumers even more careful about spending and the TV space has also not been spared from similar inventory issues and target cuts.  While it is not surprising that the bulk of the shipment reductions would be LCD based, given its dominant share of the set market, both Mini-LED and OLED TVs are expected to see continued growth this year of what is expected to be a 270m to 280m unit market.  Unfortunately, the malaise that has set over the TV market since the end of 1Q continues to extend and estimates for both of those TV set growth products are beginning to decline.
Most recently OMDIA reduced its expectations for Samsung’s Mini-LED TV shipment target from between 3m and 3.5m to just 3m and while the category is still seeing massive growth (8.3m units this year up from 1.9m last year), trimming the more aggressive targets seems the case recently, although the growth in the category is still massive.  Mini-LED is also applicable to IT products, typically monitors and laptops, where shipments are expected to grow by 45.5% this year to 20.8m units but only by 3% in 2023, leading to a decline in Mini-LED IT shipments in 2024 and 2025, under the scenario that despite Apple’s increased use of Mini-LED going forward, the company will shift to OLED in those later years.

In the US (2020) Christmas is the biggest spending holiday, generating ~84% of yearly retail sales, with Labor Day a distant 2nd at 3.66%, but that does not preclude retailers from offering financial inducements to encourage shoppers during lesser holidays, especially when demand has been weak in previous months and inventories are high.  With Memorial Day coming up on Monday, retailers, both brick & mortar and on-line, are beginning to offer discounts to grab some attention and stimulate CE sales.  We went back to Samsung’s (005930.KS) Mini-LED/QD TV line to see if there have been significant price changes in both the older 2021 line and the new 2022 line.
For reference Samsung introduced its 8K/4K Mini-LED/Quantum Dot TV line in May of last year, offering two categories of 8K Mini-LED/QD TVs, two categories of Mini-LED/QD 4K TVs, and three lines of Quantum Dot only TVs, for a total of 35 different models.  This year they updated those lines and brought the model count down to 33, eliminating some models that had very similar features, but continued to sell much of the 2021 line along with the newer 2022 models.
 As we have been collecting pricing data on the 2021 line since its release, the latest round of discounts has now brought the price of last year’s Mini-LED/QD and QD only line down from 29.2% early this month (from original price last May) to down 34.2% currently, although only 24 of the 35 models were at their lowest price point, down from 27 earlier this month.  8K Mini-LED/QD sets have declined the most since last year, down 41.7%, while 4K Mini-LED/QD sets have declined 39.9% over the last year, with QD only sets down 28.1% in the aggregate.
Since the Samsung 2022 Mini-LED/QD line was released in April today’s readings are the first to show discounting from those original prices, with an overall decline of 7.0% from initial April pricing, andthat includes one model set (4K Mini-LED/QD) that was just released.  8K Mini-LED/QD sets declined 8.1%, while 4K Mini-LED/QD sets declined 5.3%, and QD only sets dropped 8.3%.  In order to illustrate the price path of the 2021 models and the staring points of the equivalent 2022 models we have the price charts for the various models below.  W note that while the 2021 timeline is accurate, we have added the 2022 models as if they followed the same 2021 timeline to see how they track against last year’s price reductions and starting points, with the 2022 models represented as dotted lines. 
In most cases the 2022 line initial prices were lower than those in 2021, with the average 2022 starting price for the entire line 6.7% below the initial price of the 2021 line, which would portend interim and holiday pricing for the 2022 line below that of last year.  LCD TV panel prices have certainly come down on a y/y basis and we expect Mini-LED backlight arrays have also been reduced in price as new suppliers enter the market, but other components, raw materials, and transport costs have increased, offsetting some of those panel and backlight price declines.  Chinese brand TCL (000100.CH), the first TV brand to offer Mini-LED TV sets, has just released their 2022 (4th generation) Mini-LED/QD set line, which is priced considerably below the Samsung line, which would likely account for Samsung’s first round of price cuts (see Table 1 ), although Samsung considers its TV line to have more sophisticated features and a higher quality than Chinese brands and therefore deserving of a premium.  Consumers will determine if that is true for this line….

China’s TCL (000100.CH) was the first major TV set brand to release a mini-LED based TV and is now on its 4th generation of such devices, while major competitor Samsung Electronics (005930.KS) has recently released it 2nd generation Mini-LED TV lineup.   TCL has approached the Mini-LED/QD TV market differently than its competitors, pricing its sets considerably below major brands to generate high unit volumes and the most recent additions are more of the same.  While we don’t yet have full specifications to compare against for the TCL line, we can give some approximation as to the comparable sets in the Samsung line, which points out that price difference.  Again, the TCL and Samsung sets do not have the same feature sets so a point-by-point comparison is not being made here, just a rough idea as to the price points and the TVs have yet 

Now that Samsung Electronics (005930.KS) has begun to market its 2022 Mini-LED/QD TV line we have two data sets to compare, and in an unusual environment.  On the positive side (for TV brands) TV panel prices continue to decline, which is usually the key to generating higher TV set revenue, but at the same time other component costs and transportation costs are rising, with the specter of inflation reducing consumer buying power.  Typically when the yearly new TV line is released, previous year’s models decrease in price as new inventory is acquired, however if the new line is appreciably more expensive than the previous year’s models, older model demand and price can increase as consumers look for an alternative to the higher priced current year models.
This year seems different in that while last year’s models have been declining in price as Samsung released this year’s models, those declines seem to have slowed recently, with charts for last year’s model prices beginning to level off and new model prices declining at a slower pace than last year.  We expect this has little to do with ‘alternative’ pricing and more to do with component and transportation costs that are more than offsetting TV panel price declines.  2021 models are still down 7.5% YTD, but such declines seem to be slowing and prices leveling off.   New model prices are also declining as expected but so far at a slower rate than last year, likely for the same reasons.  All in what looked like a good year for TV set sales now is beginning to look a bit less so as COVID-19 lockdowns in China and continuing shortages are wiping out some of the positives that would help the TV set space this year

​Now that Samsung Electronics (005930.KS) has begun offering its 2022 line of Mini-LED/QD and QD only TVs (or at least in part), we can look at how TV set pricing has progressed with last year’s models and how the new line’s pricing compares with 2021 pricing.  We note that while this is a microcosm of the TV space, it is at least a representation of how companies adjust TV set prices, particularly in the premium category and how seasonality and other factors affect that pricing.  The 2022 Mini-LED/QD and QD only line is essentially the same as the 2021 line other than the elimination of the 70A (2021) class, which consisted of four sizes of 4K Quantum Dot TVs.  Given that the series above (80A) and below (60A) duplicated all of those sizes and provided almost the same combination of features at similar prices, we expect Samsung saw no need to bring back that line.

When Samsung began to accumulate TV panels for the Mini-LED/QD line last year TV panel prices were on the rise (Figure 1), while this year TV panel prices had fallen considerably from the highs reached in July of last year.  Based on February Aggregate TV panel pricing, TV panels acquired in February 2022 were 38.8% lower in price than during the same period last year, while offsets would be rising component, silicon, and transportation costs, but Samsung has lowered the initial price of this year’s models by only 6.7%, with the bulk of the reductions in the lower price tier Mini-LED/QD line (85 Series) and the higher prices QD only line (80 Series).  Due to the potential for feature changes and potential cost offsets mentioned above in the 2022 line, it is difficult to understand exactly how much of the panel cost savings Samsung has passed on to consumers, at least as part of initial 2022 pricing, but we assume they continue to capture considerably more margin on this line than on the more generic standard LCD TV line.  We expect also that Mini-LED backlight costs are lower on a y/y basis as the number of suppliers has increased.
Based on the rate of change data (Figure 1) for the entire line, we expect to see price reductions as soon as the end of May, with the biggest price drops in June/July (summer sales), for Columbus Day in October and the Thanksgiving Holiday.  That said, the single largest overall price decline came in February of this year, usually due to a push to reduce previous year inventory as new models go into production.  The worst time to buy, at least from this sample, is right before Christmas, as desperate gift buyers tend to be more willing to pay a premium as time runs out, and similarly just before Chinese New Year, likely for the same reason.  Most significant however, is the fact that in the 328 days since the 2021 line became available the aggregated price of the entire line has decreased by 29.6% from initial prices, and 27 of the 35 models are currently at their lowest price point (one is at its highest), and across the top of the line (900 Series), which are 8K Mini-LED/QD sets, that group is down 46.7% from its initial pricing.