How AI is impacting the pricing of television sets

MUMBAI: Here is a line nobody in the TV trade expected to read in 2026. The chips inside a budget television now cost more than its screen.

Omdia’s numbers, reported by DigiTimes and picked up by TechRadar on 3 October, put the processing board of some small LCD sets at 45 to 50 per cent of manufacturing cost. Eighteen months ago it was barely 10 per cent. For as long as anyone can remember, the panel has been the TV maker’s big worry. Now it plays second fiddle to a handful of memory chips.

The cause sits far from the living room. AI data centres are gorging on memory, and Samsung, SK hynix and Micron are feeding them first. Every wafer they put into high-bandwidth memory (HBM4) for Nvidia and AMD is a wafer that does not become DDR4 for a television motherboard.

The arithmetic is simple. AI customers pay handsomely. TV makers haggle over cents. If you ran a memory fab, you would make the same call.

That explains the eye-watering prices. Basic DRAM reached about $25 a chip in August 2026, up 4.4 times in a year. NAND flash rose to around $30.50, close to nine times its price a year earlier. TrendForce says the 4GB DDR4 that sits inside most 4K sets had more than quadrupled in price by January.

The TV industry has lived through component shocks before. The 2020 to 2022 panel shortage was driven by pandemic factory shutdowns and a rush of work-from-home buying. Panel makers built new capacity, demand cooled and prices settled.

This time the competing buyer is the AI industry, and it is not about to go home. Micron says 75 per cent of its 2027 memory supply is already spoken for. Its record $133 billion in fiscal 2026 revenue barely moved its share price, which tells you investors expect scarcity to stick around. New memory fabs take years and a mountain of capital to build. Even when they open, the AI customers will be first in the queue.

The damage is concentrated at the bottom of the market. A 32-inch LCD panel can cost under $40, so a memory bill north of $50 tips the balance. On a 75-inch OLED the panel costs hundreds of dollars and the chips are a rounding error.

That is bad news for brands that live off entry-level sets. It is worse news for retailers, who use cheap TVs to pull shoppers through the door. If wholesale costs climb while shelf prices stay put, retailer margins get squeezed faster than the makers’.

There is a sting in the tail for the smartest TVs too. Sets loaded with app stores, voice assistants and streaming hubs need more memory. The brands that sell hardest on smart features are the most exposed to this shock.

Markets where small screens still sell in big numbers, India among them, should take note. A cheap 32-inch smart set has long been the bottom rung of the price ladder. That rung is now under strain.

Expect brands to stop absorbing the hit. TrendForce already calls retail price rises increasingly likely and has flagged further cuts to 2026 shipment forecasts.

Expect the 32-inch set to be squeezed out at some brands, with shoppers nudged towards 40-inch-plus models where the sums still work. That raises the real entry price of a new TV.

Expect TV makers to look east for memory. China’s CXMT is expanding in DRAM and YMTC in NAND, and both will be happy to court customers that the big three have left waiting.

And expect the same story to pop up elsewhere. VR headsets and SSDs have already felt it. Routers and smart speakers draw on the same pool of memory.

For years the AI revolution was promised on our screens. It has finally arrived in the living room, through the back of the telly, with the bill attached.