Price rise and shortage may become the biggest “difficulty” of LED display industry this year

In fact, the phased shortage of domestic chips, has begun to affect the LED display industry including Micro/Mini LED high-end new products on the market cycle, sales process; And small and medium-sized enterprises are also facing the dilemma of “doing thanks to more” and “not daring to accept a single”.

Product organization upgrading and adjustment, accelerating the imbalance between supply and demand

1. In recent years, the consensus of the industry is that there is little profit space left in the low-end market, and only by increasing the proportion of high-margin products and forming differentiated competition can sustained profitability be maintained. Therefore, the LED display industry continues to upgrade the product structure and reduce the production capacity of low-end products. Major chip manufacturers also adjust their production capacity accordingly. Along with the improvement of the gross profit rate of manufacturers, there is also the price rise of low-end LED display chips due to short supply.

2. At the same time, the global shortage of raw materials such as chips and copper remain unchanged, and the LED display industry is also greatly affected. In addition, Taiwanese chip manufacturers and foreign chip manufacturers are transforming into high-end products. For example, Jingdian has shifted most of its production capacity to high –end fields such as Mini LED, indicating that the reduction of production capacity of low-end products futher aggravates the shortage of these products. Drive up prices. With internal and external attacks, the industry is deeply out of stock.

3. Since the beginning of this year, the internal problems caused by external factors(the price of bulk raw materials continues to rise, and other key components are out of stock, etc. )(same factories stop production, hot products are out of stock)are continuing to worsen, to the leading LED display manufacturers production and management and product promotion, has brought a lot of resistance, but also let many small and medium-sized manufacturers suffering. It’ s hard to get out of the mire.

4. But at the same time, the industry also revealed that the shortage of many raw materials is not really” out of stock” in nature, but a large number of raw material suppliers faced with rising raw material costs and the purchase price determined by the enterprise as early as the end of last year, because the” purchase price is lower than cost price”, so they cannot guarantee the full supply of parts. On the one hand, in order to maintain business and contract, can only supply a little, and then strive to negotiate with the downstream terminal LED display manufacturers price space. On the other hand, many raw material factories in the case of not making money, have the intention to quit but fall into a dilemma-continue to produce will lose money, stop production and afraid of future production.

5. In the face of this situation, many LED screen enterprises bluntly : the price of raw materials, as well as the chip shortage and other shortage and other external factors, caused by the production and management of enterprise to continue the problem, is becoming a “swamp” in the industry this year. Recently, although the relevant ministries and commissions of the state began to rectify the continued surge of bulk raw materials, but the high level of raw materials, as well as chips and other raw materials in short supply, basically within this year, has found an effective solution. Moreover, this series of problems, in the short term can not be effectively controlled, may be interpreted as the next stage of the external resistance plaguing many manufacturers’ market operation activities.

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