Morgan Stanley TFT-LCD Panel Price Outlook

Morgan Stanley expects February 2026 television panel prices to rise 2% month-over-month, with mainstream sizes including 32-inch, 43-inch, 55-inch, 65-inch, and 75-inch panels increasing by 3%, 2%, 2%, 1%, and 1%, respectively. Monitor panel prices are projected to edge up 0.1%, while notebook panel prices should decline 0.5%. This upward pricing momentum in the television segment is primarily driven by brand inventory replenishment ahead of promotional events in the first half of 2026, including the Winter Olympics and the World Cup. Supply-side discipline also remains robust, as Chinese panel makers plan 5 to 8 days of annual maintenance during the Lunar New Year, lowering the industry's average utilization rate to roughly 80% for the first quarter. Despite these favorable pricing dynamics, the report cautions that risk-reward profiles for Taiwanese panel stocks are becoming less attractive following significant share price rallies, particularly as valuations approach 1.0 times price-to-book. Current market enthusiasm surrounding non-display ventures like fan-out panel-level packaging and low-earth-orbit satellite antennas may also be premature, as meaningful revenue generation will take time. In mainland China, Morgan Stanley prefers BOE (000725.SZ) over TCL (000100.SZ), citing BOE's distinct scale advantages, higher display business concentration, and cheaper valuation. The broader industry is undergoing structural changes, characterized by Chinese manufacturers pivoting toward profitability over mere volume, reduced government subsidies, and tighter supply discipline, all of which favor established incumbents.