Mid-may, the domestic LED direct display industry ushered in five enterprises to adjust the“Price”: among them, the price of four, a price. The highest gain was 10 per cent and the highest decline was 11.5 per cent. Prices have gone up and down, leading many in the display industry to call it“Incomprehensible”!

The fact that the prices and demand have been at a low point over the years is that the enterprises that are experiencing price increases, such as wood forest, Higashiyama precision, Shisheng optronics and Liard, etc. . Among them, Higashiyama precision and Shisheng optronics are midstream packaging enterprises, both mentioned the“2022 since the decline in the price of lamp beads,” and further pointed out that this gives the enterprise continued sound operation brought pressure. According to data from TrendForce, the upstream market for LED chips, with all application lines performing poorly in 2022, saw the global market for LED chips drop to $2.9 billion, down 20% year-on-year. Among them, the lighting application downturn is the worst-hit areas. At the same time, the market for LED display chips fell to $570 million in 2022, down 17 percent from a year earlier -- a market that outperformed the lighting market but was struggling. Data also showed that LED display packaging sector, due to lower prices and lower orders downstream of the impact of the 2022 full-year market size of $1.45 billion, down 16% year-on-year.

From a certain point of view, the current LED upstream chip is still in 2022, the beginning of the“Historical low point.”. Such a low price background to the entire industry transmission, for the middle of the impact of packaging enterprises is great: first, the upstream chip price is low, the terminal market climate in general, there is a natural“Price exchange volume” of the overall expectation; Second, although the upstream prices of new products lower, but the terminal packaging enterprises involved in other materials, materials and human costs in 2022 showed an overall rise. At the same time, since entering the 2023 market, LED market demand “Changes less than expected.” On the one hand, the demand on the international market continues to show the traditional trend of low demand under the influence of global macroeconomic fluctuations, at the same time in 2022 the more rapid growth of emerging demand is also becoming more conservative. On the other hand, domestic market demand, although improving overall, but the overall remains low, especially lower than previously expected.

In recent years, with the development of COB technology, ultra-micro-spacing products and mass transfer technology, more and more downstream terminals and upstream chip companies are involved in the intermediate link of“Encapsulation”. The competitive pressure of packaging enterprises is increasing, especially in the middle and high-end product market, and its“Structural comparative discourse advantage” has declined compared with chip and terminal enterprises. It can be seen that the pressure on LED packaging enterprises is now relatively large, and that is to say, the impact of short-term factors, but also the impact of long-term changes in market structure and competition patterns-especially the historical low prices, can not exchange the short-term background of the market increment, let the enterprise have to pay more attention to“The operating cash flow” the quality: namely, some experts believe that, lED industry price trend has been from 2022“Psychological” on the“Price for volume”, now more focus on the“Low-cost stock of cash” logic.

“The mindset is changing”. In this context, the cost structure is more complex, and by the upstream and downstream markets together squeeze the role of the“Middle Package” link, the first price trend is understandable: the industry said so. Terminal and upstream, “Price demand” is also different in the industry price fluctuations in the past week, China Star Optical announced May 25, unit prices of some RGB products were cut by 3.5 to 11.5 percent, citing“Tough times together”: China Star Optronics said, “The LED industry is getting warmer and colder, and the recovery situation is like a spark. There is no momentum to start a prairie fire. In order to promote the healthy development of the industry, maintain the industry pattern, share the difficulties with everyone, and work together to promote the gradual recovery of the industry.” This confirms the industry's “Trough in prices, trough in demand, 'the barter situation is not taking shape'” and the 2023 recovery is “Less than expected”. But, under the same background, the country star photoelectric choice is not“Other mid-stream manufacturers price”, but price!

In fact, the star is not only the middle of the manufacturers, but also upstream manufacturers. Middle and upper reaches of all-inclusive, is the basic characteristics of the state star photoelectric. At the same time, in recent years, China Star LED display in multi-in-one IMD, MIP and other emerging packaging and high-performance low-cost micro LED technology progress more prominent, the high-end market share into an incremental trend. The innovation advantage has greatly enhanced its overall performance to the price cost and the market demand fluctuation adaptability. “The closer you are to the upstream, the greater the cost and price initiative. This is in line with the higher concentration of core technologies in the LED industry upstream.” The“International market autonomy” of the upstream industry chain enterprises in our country is not comparable between the middle-stream enterprises and the downstream terminal enterprises. In this regard, some analysts believe that the LED display industry downstream terminal enterprises have been“Price cost” the most sensitive link. In particular, since the middle of 2022, the international exchange rate pattern changes, the US dollar interest rate cycle, for some relatively dependent on“Non-our mainland upstream chip” LED enterprises operating costs, has had a greater impact. LED enterprises in our country generally have a huge proportion of export market, the international market has become the Pillar of enterprise development, LED terminal enterprise management is bound to present a more complex“Cost structure characteristics.”.

On the one hand, there are“Financial factors” such as the fluctuation of the exchange rate of the upstream components, the price fluctuation of the export of the end products, the fluctuation of the exchange rate and the velocity of the refunds in the international market, and on the other hand, ... Upstream market price trends, downstream market demand trends and other industry factors. ... and other comprehensive constraints, LED display downstream terminal enterprise price and cost bearing problem, than the middle of the package enterprise more complex . The second is for the terminal enterprise, the degree of localization of its supply chain is also quite different: some companies may rely more on the upstream supply chain in the japan-taiwan region; others are more focused on sourcing local upstream products This also determines the different downstream terminal enterprise“Cost change” may have completely different curves and time points -- some in the industry said that for the time being, it is not urgent for the terminal enterprises, most of which rely more on the local supply chain, to raise the prices of their products “Upstream chip, midstream package, downstream terminal”, LED display market cost of the three major links sometimes“Vary from person to person” . As a result, we can see that in the past week, not only four big factories have raised prices, but also one big factory has cut prices in a“Conflict pattern” However, in the long run, the competition of this industry will follow the rule of“Technology advantage + cost advantage + scale advantage”. In such a context, perhaps the price rise or fall, domestic chain-based or import chain dominance of different options, eventually into the market share of the“Rise and fall.”.

Against the trend, cash benefit first or scale first “Because the price reduction process since 2022 has not succeeded in driving a large increase in market demand, and the 2023 year domestic and foreign market demand than expected, so now the LED direct display industry is to maintain cash income first, or the pursuit of scale expansion advantage, has become a choice.”. In the view of the industry, there are price increases, there are price reductions, but also stable prices of the enterprise, which is bound to become“Incremental limited” market share pattern of the industry is changing a major variable.

From the upstream and packaging industry, the short-term“Overcapacity” is a“Bright”. According to state consultancy TrendForce, SMD LED packaging capacity has almost doubled in the past three years, with the actual market Capacity utilization about 50% by 2022, the actual productivity in 2022 is only about 30% . The good news is that while capacity for upstream chips and packages such as micro LED, Mini LED and COB is increasing rapidly, the overall capacity growth of SMD has eased significantly. However, the supply of 2023 MIPS is increasing, and comparing MIPS with technologies such as COB is a low-cost solution. “Capacity-driven cost competition escalates, innovation-driven cost declines, and the industry urgently needs incremental demand driven by multiple drivers such as costs and innovative applications”: such an industry landscape is forming a“Reverse resonance” with the global economic downturn in the Fed's rate-raising cycle, and the operating pressure will be transmitted to the LED direct upstream and downstream of the various industrial chain links. In this background, how to achieve the balance of short-term and long-term interests of enterprises, in the industry market surplus competition, small and medium-sized practitioners out of the process, to achieve strong development, is testing the wisdom of industry practitioners. Believe that as the most sensitive business and competition tools, the price adjustment in this may has not yet entered a real climax. In the future, it is worth looking forward to and observing how different enterprises in different industrial sectors will arrange price competition tools and change cost outlook by more means.

來源：投影時代