(Yicai) March 4 -- Demand for display panels has shrunk after shipments of electronics, such as smartphones, computers, and televisions, declined due to surging storage prices, even though the pace of product iteration accelerated amid artificial intelligence innovation.

“Rising storage prices have dealt a considerable blow to the entire consumer electronics sector,” Zhao Jun, senior vice president of Chinese electronics giant TCL Technology Group and chief executive officer of leading liquid crystal display maker TCL China Star Optoelectronics Technology, told Yicai.

Prices of dynamic random-access memories have approached those of smartphone display panels, according to a report by tech research firm Omdia. Handset makers have cut their procurement plans in response, which is expected to drag down shipments of active-matrix organic light-emitting diode displays for smartphones to 810 million units this year from 817 million units last year.

For TCL CSOT, small-sized mobile phone panels are the products likely to be hit the hardest by rising storage prices, Zhao noted, adding that this will result in short-term pressure on demand for smartphone-grade OLED displays.

Global personal computer shipments will likely drop 5.4 percent this year from 2025, leading to a 7.9 percent decline in display panel deliveries, according to market research firm TrendForce. Among them, OLED panel shipments are expected to grow, while those of liquid crystal displays will probably plunge.

The global PC and smartphone markets are in a worse situation than the already pessimistic outlook made months ago, according to International Data Corporation. Storage supply challenges will persist this year, with global PC and smartphone shipments projected to fall more than 11 percent and nearly 13 percent, respectively.

The 2026 Winter Olympic Games and the 2026 Fédération Internationale de Football Association World Cup in North America are expected to boost large TV consumption, Zhao predicted. According to a third-party forecast, TV demand will likely increase 1 percent to 2 percent this year, while the total TV screen area is projected to jump more than 3 percent.

International sports events and the continuation of consumer electronics subsidy policies supported display panel prices in January. Production controls implemented during the Chinese New Year holiday tightened supply, driving panel prices in February. The overall price trend in the first quarter will depend on manufacturers’ production control pace and market consumption capacity this month.

TCL CSOT is considering new overseas investment layouts, including expanding manufacturing bases and supply chains, given the stable production at its Indian and Vietnamese factories last year, Zhao said. This year, the company will also strengthen its automotive display business in Europe, he added.

At this year’s Mobile World Congress in Barcelona, display panel makers have brought new technologies and products that meet the fast-changing demand and high requirements from AI terminal devices, including for power consumption, battery life, and low-power technologies.

Editor: Futura Costaglione