How TV tariffs are shaping assembly location decisions in 2025

Tariffs are playing an increasingly critical role in where TVs are assembled, shaping supply chain strategies based on the country of sale. For consumer tech companies, understanding these shifts is essential to staying competitive in a changing trade landscape. Kelly Lee, Principal Analyst, in Omdia’s TV Set Research group explores the implications in more detail in her latest blog.

The TV supply chain begins in China where  core components such as glass panels and semiconductors are manufactured. The scale and specialization of these production facilities require them to be located close to factories where TV parts are assembled. Historically, when TVs were smaller and tariffs were lower, final assembly often took place in China. Low labor costs and high levels of automation made China a favorable location for end-to-end TV production. Finished units were then loaded into containers and shipped to their destination market.

Why TV Assembly for the US market shifted to Mexico

As recently as 2018, most TVs sold in the USA were assembled in China. However, two major altered that dynamic: tariffs on Chinese manufactured goods increased and TV sizes began trending significantly larger.

Prior to the escalation of trade tensions, the tariff on Chinese-manufactured TVs stood at 11.4%. The most popular TV size in North America in 2025 is 65 inches, with demand rapidly rising for 75 inch and larger models.

Starting in 2019, Mexico emerged as the preferred location for  assembling TVs destined for the USA market.  Thanks to the USMCA trade agreement between Mexico and the US, TVs assembled in  Mexico can enter the US with a 0% tariff. TVs that are 65-inch and larger packaged in large sturdy boxes for retail sale are not only more costly to ship long distances but also too bulky and heavy to transport in containers. As a result, proximity to the end user has become a critical factor in supply chain decisions.

By January 2025, 65% of the TVs imported to the USA were assembled in Mexico.

Understanding how tariffs and cost drivers influence TV assembly location decisions

According to Omdia’s latest TV Cost & Price Forecast Model – 3Q24, the average selling price (ASP) of a modestly specified 65-inch LCD TV with a standard 4K 60Hz panel is $427 USD. This estimate is based on a configuration without quantum dot (QD) technology, running a Linux-based operating system (OS), featuring a mainstream system-on-chip (SoC) without AI capabilities, basic audio, standard mechanicals (non- Eco), conventional packaging, and a low spec remote control. (Further specification details can be found in Omdia’s TV cost & price model definition.)

In this analysis, we explore several cost simulations for assembling the same 65-inch TV in different locations. We examine how varying tariff rates apply to different manufacturing locations, and evaluate how local manufacturing conditions impact the bill of materials (BOM) and overall production costs. See the results summarized below in Figure 1.

Comparing BOM costs and ASP: Understanding Margin Dynamics

By comparing the BOM cost with the ASP, we can assess the profitability of assembling a 65-inch TV in different locations. A negative margins indicates a loss, where the BOM exceeds the ASP while a positive margin means the product is being sold at a profit.

Assuming a constant ASP at $427, our simulations show only three scenarios with positive margins. Ranked from highest to lowest: 

• Mexico (0% tariff) yields the highest margin at 12%
• Vietnam (3.9% tariff) follows with a margin of 8.7%
• China (11.4% tariff) offers the lowest positive margin at 1.5%

To explore the impact of BOM costs on final pricing when aiming for a consistent profit margin, we also modeled the ASP required to maintain a 30% margin. Margin here refers to the markup between the BOM cost and ASP, for example a BOM of $70 and an ASP of $100 represents a 30% margin. 
Using this margin (see Figure 2), the resulting ASPs are:

• Mexico (0% tariff): ASP = $541
• Vietnam (3.9% tariff): ASP = $562
• China (11.4% tariff): ASP = $606.

   

Figure 1: 65” TV BOM cost simulation by different Tariffs

Figure 2: 65” 4K 60Hz LCD  TV BOM cost by different Tariffs- Keep margin 30% and estimate new ASP

TV BOM cost is also influenced by the level of automation of the assembly factory. However, in our simulation, automation factors are not included in the cost calculations.

Looking ahead, if TV brands aim to increase their TV set prices it is essential to consider which features and applications are valuable for TV users. This includes not only hardware enhancements, but also software-driven improvements such as AI-powered features that boost picture or sound quality.

Visit our dedicated hub providing expert perspectives on the potential implications of US tariffs across key sectors.