The cost of semiconductors in a television set has overtaken the cost of the display panel itself, according to a DigiTimes report, an inversion of the traditional TV bill-of-materials hierarchy driven by a tightening memory supply market.

For most of the past two decades, the panel has been the single most expensive component in any television. Display makers in China, Korea and Taiwan competed on cost per square inch of glass, and panel prices fell so consistently that panel share of total set cost became a benchmark for TV makers negotiating with brands. That assumption has now broken.

The driver is memory. Television platforms have absorbed steadily more DRAM and NAND as smart-TV operating systems, streaming stacks and video processing pipelines have grown heavier. A mainstream smart TV today carries several gigabytes of DRAM and often embedded or discrete NAND storage — content that did not exist in the flat-panel era when the panel dominated the BOM by default.

At the same time, memory suppliers have shifted allocation toward higher-paying customers. AI datacenter demand has absorbed a growing share of wafer starts at the leading memory producers, tightening supply of commodity DRAM grades that TV and other consumer applications depend on. Contract prices for consumer-grade DRAM have firmed as suppliers prioritize premium allocations, leaving consumer electronics makers to bid for what remains.

For TV brands and ODMs, the consequence is direct. Where a set maker could previously plan around panel price curves — hedging purchases against panel maker utilization cycles — memory now sets the floor under system cost. Two components that once moved on largely independent cycles are now both supply-constrained in the same direction, removing the offset that set makers relied on when one input cheapened while the other firmed.

The shift also changes bargaining leverage. Panel makers in China have expanded capacity aggressively, keeping display pricing under pressure even as semiconductor input costs rise. Set makers therefore face a squeeze: cheap glass, expensive silicon. That margin compression lands hardest on mid-range smart TVs, where memory content is substantial but retail pricing power is weak.

The report's framing — semiconductors above panel costs — signals that the constraint on TV economics is no longer the display supply chain but the component chain it plugs into. Any easing would require either memory prices softening as AI-driven demand plateaus, or TV platforms trimming memory footprints through leaner software stacks, a path that carries its own engineering costs.

Until one of those happens, memory suppliers hold the pricing leverage in a product category where panel makers once did, and TV makers' BOM planning will track DRAM contract quotes more closely than glass prices.