At the end of 2020, what will come earlier than the cold winter is a long-prepared price increase in the entire industry chain. Recently, it is believed that many people in Maipu Guangcai LED display have been swiped by the price increase notice from the circle of friends, and basic raw materials such as PCB board, lamp beads, driver IC, and even glue have all fallen into a price increase...
In fact, the market adjustment caused by the rising cost of PCB boards has started in early October, and now, some packaging manufacturers cannot bear the pressure of rising prices of raw materials across the board, and have begun to increase the prices of some products.
In the opinion of some industry experts, this situation is mainly due to two reasons: First, the price of Maipu brilliant LED display material lamp beads and driver IC has risen, resulting in a substantial increase in the cost of midstream packaging. It is reported that due to the policy upgrade of the United States to suppress Chinese companies, a group of Chinese companies headed by Huawei have "cut supply" on the chip side, and instead rely on domestic foundry companies such as Sanan Optoelectronics. This has led to domestic The supply and demand of raw materials such as chips for the LED display industry is tight. According to the current international situation and market situation, this contradiction between supply and demand is not expected to be alleviated in a short time. Therefore, the core raw materials of LED display screens may continue to increase in price for a period of time.
The second is the strategic adjustment stage of the business. At present, more and more LED display manufacturers are seeking to explore the high-end market, and are actively trying to develop and manufacture smart high-definition large screens, 5G smart light pole screens, etc. In addition, many manufacturers are actively deploying the next-generation display technology-Micro\ Products such as MiniLED will also be mass-produced in the next 2-3 years. These have exacerbated the imbalance between supply and demand of raw materials.
How long will this wave of price increases last?
We all know that in the context of rising upstream raw materials, this is likely to cause an increase in the price of terminal products, which is really reasonable. However, for the LED display industry, which has only fallen for many years, it is quite surprising. As we all know, China's LED display industry has been fighting for many years of price wars, and consumers have become accustomed to price cuts. Now the news of price increases suddenly appears, which is somewhat uncomfortable. When will the increase in raw material prices continue? Many research institutions and companies believe that the cessation of the price increase will depend on the production capacity recovery of major domestic factories. The unanimous answer is at least until the end of 2021.
First of all, the price increase this time was affected by the recovery of the industry market, and the demand suppressed by the epidemic gradually recovered, triggering continuous price increases. Secondly, in 2021, the production capacity of manufacturers such as chips and RGB in mainland China can be basically satisfied. At the same time, at the beginning of next year, we will face the whole demand year. MicroLED needs to explode, and the demand for stocking in the first quarter; finally, there must be some speculative demand in the industry to stock up at the bottom, increasing upstream stocking pressure.
2020 will be difficult for all practitioners, and it is difficult to say whether price increases are good or bad at this critical moment. But there is no doubt that this will also bring new challenges to the entire market and dealers' operations such as picking up, stocking, and shipping. And can it become a turning point for the industry to go against the trend? It requires many manufacturers and the upstream and downstream of the entire industrial chain to coordinate "asking."