July TFT-LCD TV panel prices fell about 2% month over month, while IT panels were temporarily flat

Overview

This report tracks July 2026 TFT-LCD panel prices and investment views on Greater China panel stocks. The core conclusion is that TV panel prices have begun to decline, mainly because order momentum is slowing in 2H26 after front-loaded inventory buildup in 1H26 ahead of sporting events and promotions; although IT panel demand is weakening, prices are temporarily flat due to cost support. Morgan Stanley believes supply discipline in the panel industry has improved versus the past, which can prevent a sharp price decline, but it is still too early to re-rate panel stocks based on the advanced packaging glass core substrate opportunity.

Core views

First, TV panel prices fell about 2% MoM in July and remain under downward pressure in the coming months; second, monitor and notebook panel prices were flat in July, with 3Q26 average quarterly prices expected to remain flat, though they may weaken from 4Q26 onward; third, the 2026 TV panel shipment mix may skew toward 1H, with 2H below seasonality; fourth, industry utilization rates remained at 80%-85% in 2Q26, showing that supply-side discipline is still in place; fifth, after the valuation pullback, panel stocks offer broadly balanced risk-reward, with BOE more attractive than TCL.

Analysis framework

The report uses monthly panel quotations, quarterly average price expectations, shipment seasonality, display maker utilization rates, P/B valuation multiples, and company progress in advanced packaging glass core substrates as its main analytical framework, while also making cross-company comparisons based on the business exposure of AUO, BOE, Innolux, TCL, LG Display, Corning, and Novatek.

Methodology notes

• Price cycleMonthly MoM and quarterly average price tracking

  Use MoM and QoQ changes in panel prices to identify turning points in the industry cycle.

  The report notes that TV panel prices rose from January to March, were broadly flat from April to June, and fell about 2% in July, consistent with the view that prices began to decline from 3Q26; IT panels were flat in July, and 3Q26 average quarterly prices are expected to remain flat.

• Supply-demand analysisShipment seasonality and front-loaded inventory buildup

  Use the 1H/2H shipment mix and brand inventory buildup timing to explain price pressure.

  Over the past decade, TV panel shipments have typically been distributed around 49%-51% between 1H and 2H; in 2026, front-loaded inventory buildup ahead of the Winter Olympics, the World Cup, and China's 618 promotions is expected to skew the shipment mix toward 1H, leading to slower order momentum in 2H.

• Supply disciplineDisplay maker utilization rates

  Use utilization rates to assess whether the supply side will amplify downward price pressure.

  The report says industry utilization rates broadly stayed at 80%-85% in 2Q26, reflecting continued supply discipline and helping limit the decline in TV panel prices.

• Valuation methods2026e P/B multiples

  Use forward P/B multiples to assess panel stock risk-reward.

  AUO's target price is based on 1.4x 2026e P/B, BOE on 2.5x 2026e P/B, Innolux on 2.1x 2026e P/B, and TCL's target price implies about 1.7x 2026e P/B.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• AUO (2409.TW)

  A Taiwan panel maker with high correlation to TV panel prices and the display industry cycle.

  Strengths

  As a major panel maker, supply discipline can provide downside price support, and the company is advancing business diversification.

  Weaknesses

  The TV panel price upcycle is nearing its end, and it will still take time for diversified businesses to make a meaningful earnings contribution.

  Comparison

  The report describes its valuation as broadly reasonable after the recent pullback and rates it Equal-weight.

  Risks

  If TV panel prices fall more than expected, or if diversification contributions are delayed, valuation support may weaken.

• BOE Technology (000725.SZ)

  A large mainland China panel maker and seen as one of the beneficiaries of the glass core substrate opportunity.

  Strengths

  Scale advantage, higher display business exposure, and faster progress in glass core substrates.

  Weaknesses

  Still affected by the panel price cycle and slowing demand.

  Comparison

  The report explicitly prefers BOE over TCL, with a target price of Rmb9.30 based on 2.5x 2026e P/B.

  Risks

  If commercialization of glass core substrates progresses more slowly than expected, or if industry competition intensifies, the re-rating thesis may come under pressure.

• Innolux (3481.TW)

  A Taiwan panel maker that may participate in a glass core substrate project for a foundry customer.

  Strengths

  Has potential opportunities to participate in advanced packaging-related projects.

  Weaknesses

  The report does not expect a meaningful contribution before 2028, and more competitors may enter during the mass production stage.

  Comparison

  Rated Equal-weight, with a target price of NT$60.00 based on 2.1x 2026e P/B.

  Risks

  Delayed advanced packaging contributions, intensifying competition, and a weakening panel cycle could all weigh on valuation.

• TCL Corp. (000100.SZ)

  A mainland China panel-related company affected by TV panel prices and industry supply-demand dynamics.

  Strengths

  Benefits from industry consolidation and improved supply discipline.

  Weaknesses

  The report views it as less attractive than BOE, with the current valuation at about 1.7x 2026e P/B.

  Comparison

  The report prefers BOE over TCL; TCL is rated Equal-weight with a target price of Rmb4.70.

  Risks

  If TV panel prices decline or valuation reverts to the mid-cycle average, the stock price may come under pressure.

• LG Display (034220.KS)

  A Korean display panel maker tied to its OLED business and changes in end-market demand.

  Strengths

  OLED revenue contribution should gradually improve earnings starting from 2H25.

  Weaknesses

  Potential end-market weakness prevents the report from turning more constructive.

  Comparison

  The stock trades at about 0.8x 2026e P/B, above the historical mid-cycle level of around 0.5x.

  Risks

  Weak end demand may offset the earnings improvement brought by OLED recovery.

• Corning (GLW.N)

  A display glass supplier whose display business is closely tied to panel maker utilization rates.

  Strengths

  Its display business is operationally efficient and may see margin support from more FX-related price increases; its optical communications business is also returning to growth.

  Weaknesses

  The display business remains highly correlated with panel maker utilization rates.

  Comparison

  Compared with panel makers, Corning benefits from glass supply chain efficiency and the earnings contribution of its display business.

  Risks

  If panel maker utilization rates decline, GLW's display business volume and revenue may come under pressure.

• Novatek (3034.TW)

  A Greater China DDIC supply chain company affected by demand in PCs, smartphones, and autos.

  Strengths

  Its OLED DDI roadmap is more competitive than major Korean peers in both performance and cost, helping it enter the Apple iPhone supply chain.

  Weaknesses

  The report says its Underweight view is driven by weak PC, smartphone, and auto demand, gross margin pressure, and a lack of new growth drivers.

  Comparison

  Compared with panel makers, Novatek's main issues are concentrated in downstream end-demand and the DDIC competitive landscape.

  Risks

  If end demand remains weak or gross margin pressure increases, earnings and valuation may remain under pressure.

Key data

• July TV panel pricesabout -2% MoM32/43/55/65/75-inch panels fell 3%/3%/2%/2%/1%, respectively.
• July IT panel pricesFlat month over monthMonitor and notebook panel prices were both flat.
• 3Q26 TV panel average quarterly price outlookLow-single-digit percentage QoQ declineAfter front-loaded demand, 2H26 shipment momentum is expected to come in below seasonality.
• 3Q26 IT panel average quarterly price outlookFlat QoQWeak demand but component cost pressure supports near-term prices.
• Display maker utilization rateabout 80%-85% in 2Q26Broadly flat versus prior quarters, reflecting supply-side discipline.
• AUO valuation and ratingEqual-weight; PT NT$27.00; 1.4x 2026e P/BThe report believes the TV panel price upcycle is nearing its end, but supply discipline provides downside support.
• BOE valuation and ratingOverweight; PT Rmb9.30; 2.5x 2026e P/BThe report prefers BOE because of its scale advantage, higher display business exposure, and faster progress in glass core substrates.
• Innolux valuation and ratingEqual-weight; PT NT$60.00; 2.1x 2026e P/BParticipates in glass core substrate projects, but a meaningful contribution is not expected before 2028.
• TCL valuation and ratingEqual-weight; PT Rmb4.70; about 1.7x 2026e P/BThe current trading multiple is about 1.7x 2026e P/B, above the roughly 1.4x mid-cycle average since 2022.

Impact & implications

For investors, panel prices have entered a downward phase in the short term, limiting the upside elasticity of traditional panel stocks; supply discipline and improved industry structure make the risk of a sharp price decline relatively controllable. Advanced packaging glass core substrates are a potential re-rating factor, but the report believes the timeline for revenue and earnings contribution to materialize is long, and competition may intensify during the mass production phase, so this opportunity should not be capitalized into panel stock valuations too early.

Risks

• If demand from major end applications is stronger than expected, panel shipments could be stronger and price pressure could be less than the report expects.
• If major panel makers implement stricter output controls, downward price pressure could also ease in a weak-demand scenario.
• If progress in non-commoditized display businesses is faster than expected, panel makers' financial performance could outperform the report's expectations.
• If the advanced packaging glass core substrate opportunity commercializes faster, related panel stocks could be re-rated earlier.
• Conversely, if 2H26 demand is weaker than expected or supply discipline loosens, TV panel price declines could exceed the low-single-digit expectation.

What to watch

• Actual demand strength in August-September as brands build inventory for year-end promotions.
• Whether 2H26 TV panel shipments come in below seasonality and whether the impact of front-loaded inventory buildup in 1H26 fades.
• Whether 3Q26 TV panel average quarterly prices fall only by a low-single-digit amount.
• Whether monitor and notebook panel prices begin to weaken in 4Q26.
• Whether display maker utilization rates can continue to stay around 80%-85%.
• The mass production timing, customer progress, and competitive landscape of glass core substrate projects at companies such as BOE and Innolux.
• Whether P/B valuations of panel stocks such as AUO, Innolux, BOE, and TCL continue to reflect supply discipline and advanced packaging optionality.