​Yesterday we highlighted much of Samsung’s (005930.KS) TV line and potential new models to be released for the 2023 year.  However actual sets and pricing are not released until mid to late 2Q, so we went back to check on TV set pricing for Samsung’s Mini-LED and quantum dot TV sets now that the holidays are over, and it seems that Samsung agrees that the holiday discount period has ended.  Not only have prices increased, but Samsung is no longer offering a number of its 2021 Mini-LED/QD sets to consumers.  Many of these sets are still available from retailers or 3rd party sellers on Amazon (AMZN), but the 2021 8K Mini-LED/QD sets (900A/800A) and the 2021 4K Mini-LED/QD sets are no longer offered, other than a single 55” 4K Mini-LED/QD model that saw a 40% increase in price over the last 43 days since our previous check.  Samsung is still offering all of the quantum dot only TVs from 2021, as shown in the table below.
Samsung’s lines from last year are all still available but saw price increases between 0% and 120% from our last check, which was the day before Thanksgiving (2 days ahead of Black Friday).  Two models in the 2021 line (of those that were still available) were equal to or at their lowest price, while only 3 were at their lowest price from the 2022 line, and we not that the 98” versions in all lines do not seem to be offered since last October.  This could be relatively country local but given that the US is a strong ultra-large market, it seems unlikely.  One a composite basis, the 2021 Samsung Mini-LED/QD and QD only lines saw a 4.6% increase in price since pre-Thanksgiving and are down 26.1% from their original price, although we only include those that are still available.  The 2022 line, which remains fully available, saw a 17.4% composite price increase since 11/23/22 and is currently down 23.1% from initial pricing.  Samsung’s QD/OLED TV line, which currently consists of 55” and 65” models, saw a price increase of 5.9% since 11/23/22 and is currently down 34.5% from its initial pricing.
As we would expect, almost all of the 2021 and 2022 Mini-LED/QD and QD only line reached lows around Black Friday 2022 as TV set brands sacrificed margin to move inventory which had been piling up as inflation worries dragged down consumer spending.  While the price bounce back since Black Friday looks severe in some instances, for example Samsung’s 55” 4K Mini-LED/QD 95B series set jumped froma low of $1,000 on Black Friday to its current price of $2,200, that same set was selling for $2,200 in August of last year and began a downward spiral in September 2022 that led to the $1,000 holiday price.  This was the extreme, although the upper tier 4K Mini-LED/QD models, especially the smaller sized TVs, saw the biggest holiday discounts and very oversized snap-back pricing currently.  Samsung seems a bit lees inclined to offer more sustained discounts, as we expect inventory levels are more in line with demand and seasonality, but while internal TV set targets have been set for 2023, public acknowledgement of those tyargets has been withheld so far this year.  We expect most brands will struggle to maintain positive y/y unit volumes in the TV space and will be a bit more rational about plans for 2023 after the 2H debacle last year.

As the largest TV set manufacturer, Samsung Electronics (005930.KS) tends to set the tone for the space each year, usually with announcements at the Consumer Electronics Show in Las Vegas, which begins tomorrow.  That said, many company pre-emp their booths at the show by pre-announcing a bit about what they are going to announce at the show, and Samsung has done so.  While much of the details will have to wait until the show is underway, Samsung did make available a few details as to how its TV line will look heading into 2023. 
We note that predictions for the TV space in 2023 are just beginning to be forecasted and a few targets are being bandied about, but after the tumultuous year the CE space faced in 2022, we and others seem a bit more cautious about making predictions this early in the year.  Excluding our own forecasts, which we have yet to make, the general tone for the TV set industry is looking flat to down slightly, and has the potential to fall below 200m units for the first time since 2017, but TV set brands are a confident lot, especially this early in the year, and are making plans to build up their consumer TV offerings as they do each year.
Samsung Electronics does have some problems in the TV set space, particularly when it comes to OLED TV, where fellow South Korean competitor LG Electronics (066570.KS) and its display LG Display (LPL) dominate the OLED TV space.  As Samsung Display (pvt) decided many years ago (2013 to be exact) that it was not economically feasible to produce OLED TVs using the same production methodology it used to produce OLED smartphone displays, it abandon the production of OLED TVs, eventually backing the use of quantum dots to enhance the company’s existing LCD TV technology.  Samsung Electronics championed QDs and adopted it across a wide swath of its LCD TV line over the years and has since added Mini-LED backlighting to its higher end models, but lacked a TV set that could compete directly with LG’s OLED TV set line, which has been gaining traction as LGD slowly added capacity.
This changed in 2020 when Samsung Display began developing production capabilities for an OLED TV of its own, but not using the same technology as used by LG.  LG Display’s OLED technology, known as WOLED, is based on a layer of yellow/green phosphorescent emitter material combined with a blue fluorescent emitter material.  These materials are coated on a TFT (Thin-film Transistor) backplane and covered with a color filter, essentially a sheet of red, green, and blue phosphor dots.  The white light created by the emitting material passes through the color filter, with each red, green, blue or ‘blank’ phosphor dot filtering out the remaining colors to produce red, green, blue, and white dots for each TV pixel, which each being controlled by the TFT structure below the emitting material.  One big drawback of this process is that using a color filter is a subtractive process, as, for example, the red phosphor in the color filter blocks the blue and green light that make up white light, which means the brightness of each pixel is severely reduced.  LG compensates by adding a transparent dot as part of each pixel, letting the unchanged white light through and adding to the pixel’s brightness, but while this helps the set’s overall brightness, it reduces the overall color intensity.
Samsung Display found that using a similar emitting structure, blue fluorescent and green phosphorescent emitters coated on a similar TFT backplane, instead of using a color filter, they could use quantum dots to convert what is blueish/green light to red, green and blue sub-pixels without much of the brightness and color loss.  Quantum dots, rather than filtering out colors, ‘shift’ the frequency of the light, so the red quantum dot took the blue/green light and shifted it to red, while the green and blue quantum dots shifted the light to those primary colors, with no need for a white sub-pixel.  The result is a TV with a more vibrant color palette, with the potential for a brighter set.
There has been a problem however, which is that LG Display has been producing WOLED TV displays for 10 years, while Samsung Display is still in what would be called relatively small scale production and that is a problem for Samsung Electronics, who needs more QD/OLED volume than SDC can produce if it is to have a significant place in the Samsung TV lineup.  Given that 2022 was really the first year of production for SDC’s QD/OLED display line, decisions as to building out new capacity needed to be based on consumer acceptance of the product, and while said displays and TVs received positive reviews, it was a terrible year for the TV set business and capacity increases were low priority.  Parent Samsung Electronics even went as far to bargain with rival LG Display over the purchase of millions of WOLED TV panels to fill out the 2022/2023 Samsung TV line, but negotiations did not resolve outstanding price issues and no agreement was made in 2022.
As Samsung Electronics begins to reveal its TV set plans for 2023, they have indicated that they will be expanding their QD/OLED TV set offerings by adding a 77” model to the existing 55” and 65” models[1] that were offered in 2022.  This was an inevitability, as premium size (>65”) TV sets continue to gain in popularity and tend to carry a higher premium than smaller sets, but indicates two things.  First, a bit more confidence in the technology by Samsung Electronics, who, at times, seemed less than enthusiastic about QD/OLED, and second, that Samsung Display has brought its yields up enough to be able to allocate some production time to 77” panels, which will likely have lower yields, and can still meet 55” and 65” QD/OLED goals, both of which are important to the decision to increase QD/OLED capacity in 2023.
In the first table below we show Samsung’s 2022 and potential 2023 TV line-up based on size.  77” models are expected to be added to the QD/OLED line and potentially the Micro-LED TV line, while there is some speculation that Samsung will add a number of ultra-large sizes to the Micro-LED line, although we expect there is currently little need for those sizes given their very high cost and the marginal sales of the ultra-large Micro-LED line overall.  One point that should be noted is that Samsung is now moving from Micro-LED TV modules based on PCB boards to TFT and Micro-LED placement on glass substrates. 
This new modality is considerably closer to the more typical TFT processes used in OLED and LCD TVs, and can reduce the cost of smaller sets, eventually putting them in a range more amenable to consumers.  We note also that Samsung has been reducing the size of each Micro-LED structure, enabling the higher resolutions needed for smaller consumer sets.  The 146” set that was shown in 2020 had a chip that was 125um x 225um which was reduced to 75um x 125um in 2021 for the 110” demo.  The 89” model is expected to have a chip size of 34um x 85um, which is a 69% area reduction in pixel size, although we note as Micro-LEDs get smaller it becomes more difficult to move them from die to substrate, so there is a trade-off as pixel size is reduced.
While the 2023 Samsung TV line does not have any major technology changes, at least at this pre-show point, it does show some progress on Samsung’s push toward Micro-LED, which remains a few years off for consumer TV products, and sets a decision point for QD/OLED.  QD/OLED capacity as it stands, is too small to be a true TV set price tier placeholder, so a decision as to whether to add capacity must be made soon.  Samsung continues to support quantum dot technology, which it has spread across almost all of its TV line, and can even be used as a simplified color conversion techniques for Micro-LED, but Samsung needs to compete with LG’s WOLED TV line, with the most likely candidate being QD/OLED, which would mean a more serious commitment to the technology at a time when capacity expansion projects are being postponed or eliminated.  Samsung has made such commitments during difficult times in the past, but the alternative would be to buy OLED TV panels from LG Display which leaves little product differentiation.  We expect Samsung to begin adding additional QD/OLED capacity before mid-year.


[1] SDC also produces a 34” QD/OLED display for monitors.

​Samsung Electronics (005930.KS) is expected to add a 77” model to its current QD/OLED TV models as it continues to improve yield at its first QD/OLED fab in Korea.  We expect Samsung to show the new size to potential customers at CES in January, and possibly make an announcement to the general public about its availability.  Samsung was particularly low-key when it introduced the initial QD/OLED sets in January of this year, likely due to the low yields that affiliate Samsung Display (pvt) had been seeing during the early days of production, and while the intro of this new size might see a bit more enthusiasm from the company, SDC’s capacity is still limited to one fab, which does not support Samsung’s need for higher volumes that would allow QD/OLED to become a substantial part of the Samsung TV set line.
That said, we expect that the decision regarding potential QD/OLED capacity expansion will be made soon, and while the TV set business is facing the same economic wet blanket that is covering much of the CE space, the ultra-large TV space, where the 77” model would fall, continues to show y/y growth.  While the commitment to additional capacity during a weak CE cycle is a risky one, Samsung Display has made such bets before, and while the decision could be postponed for a quarter or so as the global economy struggles with inflation, we expect SDC will convert existing but idle capacity to QD/OLED in 2023, .
Samsung needs a large panel OLED TV offering to compete against LG Electronics (066570.KS), and while Samsung has considerable offerings that are LCD, Quantum dot enhanced LCD, and Mini-LED/QD, the progress on Micro-LED commercialization is still out of the price range of rank and file TV buyers.  Samsung has priced its QD/OLED sets well, and we would expect the 77” model to be priced ~$3,000 initially, but expect the more steady-state price range to be between $2,500 and $2,700 90+ days after the release, making it a viable competitor to LG’s “C Series” OLED TV.  Samsung seems to be warming up to considering the QD/OLED line as a meaningful part of its overall TV line, but until a capacity expansion decision is made, we expect the Mini-LED/QD line will be the promotional favorite heading into next year. 

You thought this was going to be about some way in which liquid physics would influence the current state of the world of consumer electronics, but its not.  It is about a startup that is about to release what they say is the world’s ‘first truly wireless TV’ to the general public.  That statement is a bit misleading, as portable TVs have been around since Philco (PHG), who was originally known as a battery company, released the Philco Safari in 1958, a 15 lb. battery-operated TV ($5.25 battery extra) that sold for $250, which was more than most console TVs at that time.  Sony (SNE) followed with a 13 lb. portable TV in 1960 ($29.95 battery extra), and while the Sony set was discontinued two years later, Sony reappeared with the more successful Sony Watchman line in 1982, but was sidetracked when digital broadcasting made  it necessary to have a converter for the new TV bands.

​There are still a number of portable TVs currently available, typically used for tailgating or camping (?), that run between 7” and 16” (between $100 and $150), that run on internal or external rechargeable batteries, although brand names here are far from recognizable.  LG Electronics (066570.KS) released the ‘StandbyME’ portable TV late last year, which is a bit of a reach in terms of portability, as it is a 27” FHD LCD TV on a stand that weighs 38.6 lbs. (including stand) and has a 3 hour battery life.  It can be moved anywhere (indoors) and while it has no tuner of its own (cannot receive OTA broadcast), it does have phone mirroring, which means you can watch streaming services on the TV through your smartphone.  It sells for $1,000.
However, the company that is about to” revolutionize TV as we know it”, a start-up known as Displace (pvt), says they will change the idea of TV with their 55” 4K, lightweight (under 20 lbs) system that runs on hot swappable batteries (4 included) that are said to last about a month when using the TV ~6 hours/day.  But the company takes the idea of a portable TV further as the set mounts to any flat surface with a proprietary vacuum lock system that is easily activated just by holding the set close to the wall and giving it a slight push (company’s words).  But wait, there’s more…  In order to make the set truly wireless (there are no HDMI or USB interfaces, the company also did away with the remote control, opting for a system that recognizes hand gestures, voice commands or touch to control the set.  The company also notes that multiple sets can be mounted together to form a 110” video wall.
Without seeing the set or the price, this is a lot to absorb, and knowing that the company was formed in 2022 makes us a bit vary that this release will meet expectations, but we certainly don’t rule it out.  We will be able to see the unit in early January, at which point the company will take deposits, but it seems the sets themselves will not become available until late 2023.  Hopefully there is more to this than PR, as we do remember years ago Hisense (600060.CH) showed us a fully wireless TV demo that was powered by a transmitter than ‘broadcast power’ wirelessly to the set.  It was a great idea, with applications far beyond TV, but never got out of the demo stage, and while the set described by Displace.TV runs on batteries, it would be nice to have a portable TV of high quality.

​We have mentioned that the EU has implemented a set of power usage restrictions on CE products that will essentially ban the sale of 8K and Micro-LED TVs in the EU.  The European Commission seems to have rejected requests to review the ruling, which is to go into effect on March 1, 2023, which leaves little time for TV brands and other affected parties to make their case, with the commission seemingly unmoved by an such pleadings thus far.  That said, TV brands are a creative lot and rarely do they decide to acquiesce to regulations without a fight, so there are those in the industry that expect TV brands to adopt a few ‘new’ tactics to allow them to meet the new regulations without inventing new technology.
The Eu regulations are based on power consumption, and in that *K TVs have 4 times the number of pixels to process for each frame, they do not meet the tighter power consumption limits, with Micro-LED TVs having similar power issues.  However, when TVs are sold, the sets are typically set for the highest brightness settings to make them look as they did on the floor of the retailer (retailers always set demo sets to their ‘highest’ settings), which also sets power consumption to its highest levels.  The Eu regulations specify that the power consumption of a set is measured as the set is taken ‘out-of-the-box’, so TV brands will likely change the default brightness settings for those 8K sets to be sold in the EU, to their lowest settings, allowing them to meet the new regulations.  This might not sit well with consumers, who could be disappointed with the brightness being diminished relative to the store demo, but brands can make sure that a notification is made to EU consumers as to the setting and how to return it to the higher brightness once the set is brought home.
Of course this defeats the purpose of the EU rule, which is to lower overall power consumption, but that would likely mean little to brands that continue to build and promote 8K and Micro-LED TVs.  Brands also have another route, and that is to remove the tuner that is available in TV sets, lowering the power consumption and essentially turning them into monitors.  The tuner is the device that allows the TV  to be connected to an over-the-air antenna, and while only ~30% of TV owners receive such signals, it’s a large enough percentage that it might cause those potential 8K TV customers to stick with their old TVs, although 70% of owners, those using set-top boxes or streaming systems, would not be affected.
There is an even more subtle reason why removing the tuner for EU customers is an iffy solution to the 8k dilemma, and that is that many retailers have monitors and TVs in separate product and profitability categories, with TVs the higher margin product.  If the tuner is removed from a TV, it become questionable as to what category it falls in and whether the margins should be at the TV tier or the lower monitor tier, and retailers are typically not willing to allow those margins to change, which makes the ‘brightness’ scheme the more likely in the near-term.
We do understand the EU’s objective, and TV brands typically do not promote devices on the merits of their low power consumption, so little work toward reducing power is done unless it becomes a talking point or is the subject of new regulations, as will be the case in March.  The one thing we are sure of is that if TV set brands see 8K or Micro-LED customers in the EU, they will find a way to meet or beat the new regulations.
 

​We have mentioned that the EU has implemented a set of power usage restrictions on CE products that will essentially ban the sale of 8K and Micro-LED TVs in the EU.  The European Commission seems to have rejected requests to review the ruling, which is to go into effect on March 1, 2023, which leaves little time for TV brands and other affected parties to make their case, with the commission seemingly unmoved by an such pleadings thus far.  That said, TV brands are a creative lot and rarely do they decide to acquiesce to regulations without a fight, so there are those in the industry that expect TV brands to adopt a few ‘new’ tactics to allow them to meet the new regulations without inventing new technology.
The Eu regulations are based on power consumption, and in that *K TVs have 4 times the number of pixels to process for each frame, they do not meet the tighter power consumption limits, with Micro-LED TVs having similar power issues.  However, when TVs are sold, the sets are typically set for the highest brightness settings to make them look as they did on the floor of the retailer (retailers always set demo sets to their ‘highest’ settings), which also sets power consumption to its highest levels.  The Eu regulations specify that the power consumption of a set is measured as the set is taken ‘out-of-the-box’, so TV brands will likely change the default brightness settings for those 8K sets to be sold in the EU, to their lowest settings, allowing them to meet the new regulations.  This might not sit well with consumers, who could be disappointed with the brightness being diminished relative to the store demo, but brands can make sure that a notification is made to EU consumers as to the setting and how to return it to the higher brightness once the set is brought home.
Of course this defeats the purpose of the EU rule, which is to lower overall power consumption, but that would likely mean little to brands that continue to build and promote 8K and Micro-LED TVs.  Brands also have another route, and that is to remove the tuner that is available in TV sets, lowering the power consumption and essentially turning them into monitors.  The tuner is the device that allows the TV  to be connected to an over-the-air antenna, and while only ~30% of TV owners receive such signals, it’s a large enough percentage that it might cause those potential 8K TV customers to stick with their old TVs, although 70% of owners, those using set-top boxes or streaming systems, would not be affected.
There is an even more subtle reason why removing the tuner for EU customers is an iffy solution to the 8k dilemma, and that is that many retailers have monitors and TVs in separate product and profitability categories, with TVs the higher margin product.  If the tuner is removed from a TV, it become questionable as to what category it falls in and whether the margins should be at the TV tier or the lower monitor tier, and retailers are typically not willing to allow those margins to change, which makes the ‘brightness’ scheme the more likely in the near-term.
We do understand the EU’s objective, and TV brands typically do not promote devices on the merits of their low power consumption, so little work toward reducing power is done unless it becomes a talking point or is the subject of new regulations, as will be the case in March.  The one thing we are sure of is that if TV set brands see 8K or Micro-LED customers in the EU, they will find a way to meet or beat the new regulations.

Each holiday season we are inundated with on-line and brick & mortar ads pointing to ‘gifts for less’, ‘guaranteed lowest prices’, and ‘Save Up to XXX%’ to lure consumers into at least looking at adds that seem to offer ridiculously low prices for an almost infinite range of items.  As our focus is consumer electronics, a narrower but even more intense slice of the holiday advertising onslaught, we check to see if random samples of those advertisements are able to stand a bit of fact checking.  Our most recent dive into holiday CE ads are those from Wal-Mart (WMT), known for its vast assortment of goods at prices lower than most local retailers.  As a CE retailer, Wal-Mart is in the top 5, but not quite known for the quality of its offerings or its concentration in CE when compared to Best Buy (BBY), Crutchfield (pvt), or more local retailers, but in terms of volume, they are certainly prominent,  so we looked to their latest ad to see how things stack up.
The most current ad for TV deals features a 24” HD Roku (ROKU)-based TV for $88 (yes, $88) made by ONN, Wal-Mart’s CE house brand produced by a company known as Durabrand (pvt), which is really a tradename owned by Wal-Mart.  The TVs sold under the ONN label are actually produced by Lenoxx (pvt), ALCO Electronics (328.HK), and Funai Electronics (pvt), with Funai typically the leading producer.  This set has HD resolution and little else other than Roku built-in (subscription needed), so for anything more than basic viewing, such a set would not suffice, and we expect such a deal is a loss leader (shipping is free), so the number of sets sold at this price will be relatively limited and will likely revert back to its ‘real’ price of $130, and is available on Amazon (AMZN) from a 3rd party seller only for $194.
Following the ONN deal mentioned above were a number of Hisense TVs ranging in price from $178 for a 40” FHD LCD TV to a 58” UHD 4K model for $298.  The problem is when the model numbers are checked, it appears that these TVs are models produced in 2018, which is a sign that they have been languishing in a warehouse until some manager said to get them out at any price to create space for new inventory.  We did find a few ‘deals’ at Wal-Mart that were from more identifiable brands.

• Vizio (VZIO) 4K UHD LED Smart TV (V505-J09) – A 50” 2021 model selling for $298 at Wal-Mart.  The same set was available on Amazon for the same price and sold in April of this year for $296, its lowest price (sold for $400 on Amazon in October of 2021), so the ‘deal’ at Wal-Mart (on-line only) was the same as what was available on Amazon.
• Samsung (005930.KS) 65” 4K UHD HDR LED TV – A 65”LCD TV (UN65TU7000FXZA) 2022 model selling for $478 at Wal-Mart.  The same set is currently $448 on Amazon, its lowest historical price, with the high being $550 seen in July.
• LG (066570.KS) 4K UHD OLED Web OS TV – A 55” 4K OLED TV selling for $997 at Wal-Mart.  Amazon has the same price currently but sold the set for $977 back in October of this year$1,400 at the end of May.

There were many more, although most were selling at or above the comparable Amazon price (when available), so the only real ‘deals’ were on Wal-Mart house brands.  This is similar to the typical discounting scenarios seen at Best Buy, whose Insignia (pvt) in-house brand is also produced primarily by Funai, also a TV set producer for Vizio, one of the top 5 global TV brands, whose major shareholders include Foxconn (2354.TT) AmTran (2389.TT), and Innolux (3481.TT).   All in, unless you have a very specific need for a relatively low-grade TV, don’t be pulled in by ‘holiday deals’  unless you check specifics about the actual sets being offered.  TV set companies do not make it easy for consumers to decipher the model codes (each brand is different), so it is easy to wind up buying older models, which could lack current features.  To illustrate, here’s how the model numbers of LG sets can be broken down, with the single letter ‘Q’ indicating the model year… 

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.

The TV LCD panel market has been in decline for a number of years, a function of a relatively saturated market and more recently weak macro-economic conditions.  That said, on a long-term basis Tv panel prices have been declining, and while those declines are less evident to the consumer, those price declines actually translate into an increase in ’value’, which means the consumer is able to buy ‘more TV’ for their money.  In most cases that translates to larger TVs, or in some cases TVs with more features, higher quality, or higher resolution, which gives some credibility to a flat TV shipment scenario, but less to the decline seen in reality (see Figure 3).  
In the shorter term, especially between mid-year 2020 and mid-year 2021, there was a large spike in TV panel pricing, a function of a modest increase in demand during the worst of the COVID-19 pandemic, and COVID related shortages that pushed panel prices higher as brands were willing to pay up for access to capacity, but as the worst of the pandemic passed, demand for TVs fell back to pre-pandemic levels and more recently to new lows.  As we have noted, panel producers have been facing a dilemma as TV panel prices reach cash costs and potentially material costs.  Do they continue to produce and lose money on every panel or do they cut production?  Either choice is an expensive one, and while panel producers were coming off a few very profitable quarters during the pandemic, profitability can dry up quickly for panel producers unless they are running fabs 24/7 at near capacity. 
Eventually panel producers gave in and began reducing utilization, but this took more than a few months of ‘wishing and hoping’ that saw TV panel prices decline at a pace rarely seen in the industry.  As the TV panel lower utilization rates began to eat through panel inventory, the rate of TV panel price declines has begun to slow (see Figure 5), and we have begun to hear that some Chinese panel producers are thinking about raising prices for certain TV panels. 
Price stability is a strong incentive for any high volume manufacturer, especially ones that have seen component costs rise significantly over the last year, and we understand that panel producers have likely been breaking even or losing money on some production projects in order to keep large customers happy, but perhaps it might be wise not to push buyers into an adversarial position so quickly, making sure that excess inventory has been eliminated and that there is some semblance of demand before increasing prices.
Much of the price talk seems to be rooted around 32” TV panels, essentially the smallest typical TV panel size, and understandably so, given that such panels are currently 10% below pre-pandemic lows and 69.7% below pandemic highs (see Figure 6) and likely a money loser for most TV panel producers, but even the slightest bit of success in raising prices on just these TV panels will begin to justify panel producers raising prices on other TV panel sizes and start the process of choking off the possibility of rescuing a dismal year for the TV industry during the upcoming holiday, that we believe can only be salvaged  with the heavy discounting that might stimulate consumers to buy TVs.
Behind our doubts as to the effectiveness of TV panel price hikes, is the fact that TV set sales during the heart of the pandemic ‘borrowed’ from the 2021 holiday season and  perhaps a bit into this year’s holidays, and a worsening economic environment will do little to stimulate incremental TV set sales this year.  With both of those factors in mind, we  see the potential for any TV panel price increases as a negative that has the potential to extend the low end of this panel cycle further into 2023, and given that the number of panel producers that produce TV panels has declined as Samsung Display (pvt) and LG Display (LPL) eliminate or reduce their LCD large panel capacity, such pricing decisions are more readily falling to Chinese panel producers, such as BOE (200725.CH), Chinastar (pvt), HKC (248.HK), and CHOT (pvt), and while the Chinese LCD panel industry shows a somewhat unified face to the outside world, there is intense competition among the players that could push TV panel prices lower if such increase attempts are rejected by TV set panel buyers.
The panel business is an easily unbalanced ecosystem, known for extremes, and while panel producers are feeling the wake-up hangover after a very big party, counting on ‘the hair of the dog’ to alleviate the pain, has little basis in fact, and drinking more, or in this case raising TV panel prices quickly, will likely only serve to extend the hangover…