In the modernized society of modernization, the skyrocketing price is an eternal topic. Any price increase has become a social normal, but the price changes in the LED display industry have some exceptions. From the beginning, the rapid growth has beaten the commanding heights, to the near In the past few years, the price has fallen all the way, and the gross profit margin has fallen below the bottom line. In the shadow of the “price warâ€, the whole industry has fallen into a whirlpool of low prices. However, this year’s LED industry “price reduction tide†has ushered in a rare turn. The rising prices have gradually risen, and many manufacturers have responded. In the face of the "price surge", how to deal with LED screen enterprises has become the top priority of the entire industry.
The era of "price war"
Can you really leave quietly?
The "price war" of the LED display industry has been dragging on for several years, and has experienced great ups and downs. The early "high price" LED display has made the ordinary consumers unable to meet the needs of the market. In order to meet the wide market demand, LED display companies continue to improve production technology and Reduce production costs, so that prices gradually fall back to normal levels, towards the price of "popularization." However, this kind of mutually beneficial and benevolent price trend has not lasted for a long time. With the upgrading and popularization of the production technology of the LED industry, the strong production capacity has led to a serious backlog of the industry inventory. In this case, in order to stimulate the market demand Price cuts have become the main strategy for LED display companies, and manufacturers have naturally cut the price will cause the butterfly effect, especially for some large enterprises to cut prices, small and medium-sized enterprises can only face the scalp, so the price of LED display industry has become A protracted war has even become a "losing loss" business, and many small and medium-sized enterprises in the industry have gone down and even died.
In the first half of 2016, the “price war†of smoke mitigation still permeated the LED display market, and the entire LED industry was forced to shackle in the “price warâ€. Although in the first half of the year, some people in the industry have suggested that "the price war of the LED display industry will gradually move toward the 'value war', or it will become a turning point in the development of the industry." But as far as the situation is concerned, the LED display industry as a whole Still continuing low-cost competition, SMEs can only slowly squat down in the fierce competition of the industry.
However, the price turnaround of the entire industry came into being at the right time. After Taiwan’s Jingyuan Optoelectronics started the first price increase, Sanan Optoelectronics, Guoxing Optoelectronics, Mulinsen and other mainland companies followed suit, and the LED industry entered a period of price recovery. The mainland's LED faucet Sanan Optoelectronics followed the price of some small and medium-sized products by 10%; Guoxing Optoelectronics decided to increase the price of display devices by 10%; Mulinsen decided to increase the price of display RGB lamp beads by 5%. In addition, non-listed companies such as Cinda Optoelectronics have also raised the price of lamp beads.
According to industry insiders, after experiencing the “big reshuffle†of the industry in 2015, the price of LED chips and packaging began to bottom out. In view of the fact that price wars and disorderly competition have become a thing of the past, it is expected that this round of price recovery will continue and extend to the end products. field. In fact, the recent "price surge" in the circle of friends is not a sudden outbreak, and price fluctuations are in line with market conditions. When prices continue to bottom out, a rebound will be an inevitable event.
Upstream price increase downstream wait and see
Small and medium-sized enterprises are still cautious in the face of rising prices.
As LED manufacturing raw materials, chips, and packaging manufacturers responded to the call for price increases, some downstream LED display companies also announced notices of price increases. In view of the upstream chip companies and packaging companies, prices have risen by about 5-10%.
Many people in the industry are analyzing the incentives for this “price surgeâ€. They believe that market demand is a direct factor in stimulating industry price increases. The market demand for small-pitch LED displays is growing, and the cost of small-pitch LED displays is increasing. And the investment has gradually increased, which fundamentally determines the inevitability of price increases.
In addition, due to the inferior competition in the industry, the price of LED materials bottomed out, including the substrate increased by more than 30% compared with June, the gold increased by more than 27% compared with the beginning of the year, and the MO source price increased by 10%, the labor cost increased, etc. The bottoming out of prices is the main factor in price increases. In addition, the transformation of industry competition in a good direction is the inevitable result of the benign development of the market. In the first half of the year, the reduction of production by crystal power to increase the price space, the effect of industry de-capacity gradually appeared. Under the response of industry giants, the price boost has promoted industry competition. According to the analysis, the price increase of the follow-up industry may continue to increase, and the industry giants are also very much looking forward to the LED industry's "price surge" effect.
However, in fact, in the face of rising prices of LED chips and LED packaging manufacturers, downstream LED display companies are still a few manufacturers to raise product prices, most LED screen companies have adopted a relatively conservative wait-and-see attitude. As the “price surge†involves the entire LED industry chain, some LED chips and LED package manufacturers have adjusted their prices, which has a greater impact on the midstream packaging industry chain. According to industry insiders, the downstream finished goods market is unlikely to rise collectively because of the upstream price hikes, and the rise in the price of mid-stream packaging companies depends on the company's control over the market. At present, it is difficult to say whether the price increase of LED chips can trigger the domino effect in the downstream of the industry. Many companies have a wait-and-see attitude. However, if LED packaging manufacturers collectively raise prices, other manufacturers will follow suit, and the final pressure will be passed on to the finished products factory. .
As far as the current price increase is concerned, the market sentiment is not up to expectations. Many downstream manufacturers are not daring to raise prices. Small and medium-sized LED display companies have become cautious in the face of rising prices. After all, the strength of SMEs is relatively weak. Inadvertently, it will become a victim of the reshuffle period, so most companies in the LED industry are now cautious.
Enterprises should not be too persistent price
It is not only low-cost competition that hinders the development of the industry.
The "price war" that has been fierce all the way seems to finally come to an end in the benign transformation of the industry, but how much favorable conditions for the price increase can bring the whole LED industry to the conclusion that it is not yet fully concluded, as the LED display downstream of the LED industry chain The impact of price mobilization of screen manufacturers on the market is also crucial. Under the surge of “price surges†in the industry, LED display companies may emerge from the predicament of low prices and usher in new development opportunities.
As we all know, the low-cost competition in the LED display industry has always been a cancer of the whole industry. It has not played a key role in stimulating market consumption with continuous price reduction sales. Instead, many small and medium-sized enterprises use this kind of bad price competition. Strive to make a merger or bankruptcy with the last effort. Nowadays, the price surge has spread to LED display companies. Screen companies can not only take this opportunity to get out of the quagmire of low-price competition, but also increase the sales price of products and obtain higher profits without affecting the market. Pre-development provides more favorable conditions.
In fact, it is not just a “price war†that really hinders LED display companies from moving forward. As industry prices rise, LED display companies are strengthening their technology upgrades and brand building. "Price" has always been a sensitive topic in the LED display industry, but today, the era of "talking about price changes" seems to have gradually passed. LED screen companies should pay more attention to technology research and development and the establishment of international brands. The market returns to rationality, LED display companies should also use the better technology and better products to give back to the needs of the quality market.
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