In 2012, the LED display industry hit a big price war, and the big manufacturers with strength hope to eliminate some small and medium-sized manufacturers through price wars. The LED display industry, which has entered the integration period, is still in a situation of contending in the next few years. However, due to factors such as slowing growth and falling gross profit margins, it is difficult for the LED display industry to have investment opportunities. In 2012, the domestic LED display market showed a situation in which sales volume and price cycle were promoted. The price drop will prompt a rapid increase in sales volume, and the economies of scale brought by the increase in sales volume will further drive down prices.
The High-Tech LED Industry Research Institute (GLII) estimates that the LED display market will grow by about 10% year-on-year in 2012, reaching 24.1 billion yuan. Among them, the market size of full-color LED display increased by 15%-20% year-on-year, and shipments increased by more than 30% year-on-year.
Even so, the LED display industry is currently in a state of arbitrage, and fierce competition has forced manufacturers to aggressively cut prices to compete for orders.
Step into integration
From the current competition level of the domestic LED display industry, it is still in the early stage of product competition. The key competitive indicators are: price, quality, delivery period, after-sales service, etc. The price elements are particularly prominent at this stage. LED display prices continued to decline in 2012, down 15% -20% year-on-year.
The underlying reason for the continued decline in LED display prices is that large manufacturers with strength hope to eliminate some small and medium-sized manufacturers through price wars. However, the price war in 2012 has greatly affected the revenue performance of LED display manufacturers. It is expected that at least 30% of manufacturers' revenues will fall back in 2012.
Prices are falling, further reducing the gross margin. At present, the gross profit margin of the channel-based LED display manufacturers has dropped to 10% - 15%, and the gross profit margin of engineering channels is still above 20%. Even so, the profitability of LED display manufacturers is still weakening.
It can be seen that the LED display industry has entered the integration period, and some small and medium-sized enterprises will gradually be eliminated in the next few years. In the integration stage, LED display manufacturers with technical strength and capital strength are expected to take advantage of the strength of the capital market and the advantages of the company's own technology and channels to achieve rapid development. In the next 2-3 years, the industrial concentration of LED display will increase rapidly.
As the LED display industry has entered a mature stage, the LED display market will maintain a steady growth. The High-Tech LED Industry Research Institute (GLII) expects that the LED display market will grow at 10%-20% in the next few years. Future LED display profit growth will mainly come from traditional inkjet, neon, billboard replacement market, as well as high-definition, high-definition LED display market such as HD, 3D and intelligent.
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