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Prices of television sets are set to rise sharply this quarter and possibly beyond as companies battle an increase in component costs. The price rise threatens to derail the sector’s growth momentum of 2020 when people cooped indoors ordered new and bigger TVs for their homes.

According to industry stakeholders and experts, the cost of open-cell display panels has risen significantly amid a global shortage of integrated circuits, and a general rise in prices of other raw materials. The industry is left with no choice but to pass on the burden to customers, they said.

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Jaipal Singh, associate research manager, client devices, at International Data Corporation (IDC), said prices of 32-inch TV panels have jumped from $33-35 a few months ago to $60-65 currently. “Even though vendors are willing to pay, they are not getting inventory on time. Most vendors have struggled with panel supplies," he added.

Arjun Bajaj, chief executive and founder of Delhi-based electronics brand Daiwa, said prices could go up by 20-30% due to market constraints.

Brands such as Xiaomi, Samsung and OnePlus have already increased their TV prices by 10-15% in India. “The global market is currently witnessing a surge in inputs costs. i.e., OC (open-cell) panels used by TV manufacturers across the globe, and that has contributed to an increase in overall TV prices. Despite the new changes, we believe this will open up new avenues for the Smart TV manufacturing ecosystem in India," said Eshwar Nilakantan, who heads the Mi TV Business for Xiaomi India.

The founder of another television brand said the supply concerns are also a result of political tensions between the US and China and China and India.

“The US has control over most ICs (integrated circuits), so they’re causing all kinds of troubles for China. China, in turn, controls most open-cell manufacturing, and they’re making trouble for everyone," the person said, on condition of anonymity.

Factors such as an increase in other input costs, especially freight charges, and raw materials like copper and aluminium have also contributed to the pricing pressure on manufacturers. Freight cost between China and India has jumped three to four times, said Nilesh Gupta, director at Vijay Sales, an Indian electronics retail store.

Industry experts are meanwhile worried that higher TV prices could stem demand in the sector, which saw healthy growth last year. “Panel shortage, increase in prices of open-cell panels and also of freight charges has put a lot of pressure on vendors. As a result, we didn’t see the price correction we were expecting," said IDC India’s Singh.

Restrictions to curb the pandemic, remote working and a boom in video-streaming services have triggered a spurt in demand for TVs in 2020. Many people also opted for bigger screens that cost slightly more.

Companies like China’s Xiaomi saw the biggest growth in demand for TVs with 4K resolution last year, with 50% growth in sales of 50- and 55-inch TVs. These TVs comprised 30-35% of the total shipments for the company. Rival TCL, too, saw a 47% jump in sales of 4K TVs in 2020.

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