LED display industry “winter” has passed, we will start again in the second half of the year

The second quarter of 2020 has passed, which also means that the first half of the year has passed, and we have entered the third quarter. Recently, the WTO released an updated version of the “Global Trade Data and Outlook”. From the content of the report, global trade fell by 3% in the first quarter of this year, and it expects that the trade decline in the second quarter will expand to 18.5%. . As a major trading country in the world, my country’s trade has also been affected this year. According to the situation announced by the General Administration of Customs, the total value of my country’s imports and exports of goods trade in the first five months of this year was 11.54 trillion yuan, which is more than A decrease of 4.9% in the same period last year.
Increased by 18.8% in the first quarter, not optimistic in the second quarter
This year, due to the epidemic, most regions of the world will experience negative economic growth. This is a normal thing. Although my country has basically controlled the epidemic, as a global manufacturing country, China’s economy is closely connected with the world economy and will naturally be affected. As a non-necessity of life, many display companies must empathize with the development in the first half of the year. As far as my country’s LED display industry is concerned, the first quarter is a low season. Due to the long Spring Festival holiday, it will also have an impact on the company’s sales. Affected by the epidemic this year, the city has been closed nationwide for more than two months since the end of February, which has an even greater impact on the LED display industry. However, since the trade of most companies in the industry did not stop in January and mid-to-early February, the industry was not greatly affected in the first quarter.

According to statistics from Omdia, in the first quarter of 2020, the global LED display market continued to grow year by year, with shipments of 255,648 square meters, an increase of 18.8% from 215,148 square meters in the same period in 2019. Judging from the performance reports released by several major listed companies in the industry in the first quarter, the impact of the epidemic on the first quarter was not as great as imagined. However, in the second quarter, the global epidemic prevention and control situation is still not optimistic. Many countries are still under relatively strict control and have relatively strict controls on imports and exports. In addition, most countries other than China may not have With the complete resumption of work and production, production capacity will not be able to keep up. It is also expected that the trade decline in the second quarter trade quarter will expand.
In the LED display industry, many people in the industry believe that the figures of major companies in the second quarter may not be very good-looking. After all, most companies in the second quarter may be in the “green and yellow” stage-existing orders have been delivered or have been postponed, and No trace of the new order. The customized characteristics of LED display screens have led to severe capital chain problems for most of our companies in this situation. And there are orders to start work, no holidays, or layoffs and pay cuts, which once became a true portrayal of some display companies.
In the first and second quarters, LED display screens were greatly affected by the epidemic. From the initial resumption of work and production to the market impact brought about by the global outbreak of the epidemic, it has formed a realistic challenge for display companies. After the epidemic spreads around the world and many countries and regions have implemented economic restrictions, foreign trade companies have been particularly affected. The sluggish foreign trade has prompted the domestic market to become the main battlefield for major display companies, and companies have strengthened and increased the management and competition of domestic channels.
Product and market analysis
In recent years, the industry’s trend of being driven by small-pitch products is very obvious. In the first quarter of this year, shipments of products with pitches below P1.0 have grown strongly, and flip-chip COB and Mini LED continue to receive attention. From the point of view of the product point spacing, the expansion speed of products in the range of 1-1.99mm slowed down. Relevant data show that the 1-1.99mm category has increased by 50.8% year-on-year, and the growth rate last year was 135.9%. The 2-2.99mm category increased by 83.3% year-on-year, compared with 283.6% last year. Currently, P3-P4 is still very popular in the market, but its year-on-year increase of 19.2%, the growth rate has declined. In addition, products in the P5-P10 range dropped by about 7%.
As the mainstay of industry growth, the small-pitch LED display still occupies a very important position. In order to expand the market below P1.0, many companies in the industry have launched flip-chip COB and “4-in-1″ SMD products. Both of them are constantly followed up by new display manufacturers, and the performance of flip-chip COB is even more outstanding. A number of companies such as Cedar Electronics, Zhongqi Optoelectronics, and Hisun Hi-Tech have launched flip-chip COB products.
In addition to the continuous growth of small-pitch LED displays, the market for transparent LED screens and LED light pole screens has also received greater attention. Especially for LED light pole screens, with the help of the development of the smart light pole industry, the future development potential is generally optimistic. In fact, the epidemic has brought challenges and risks to the industry and the development of enterprises, but it also breeds new opportunities. The epidemic has promoted the development of online video conferences and provided opportunities for LED displays, such as Ledman Optoelectronics, Absen, Alto Electronics, Unilumin Technology and other companies have launched related products for the conference system.
Under the situation of normalized epidemic prevention and control, the Central Civilization Office has guided all regions to ensure people’s livelihood needs in the creation of civilized cities, and encouraged the development of the stall economy. As the stall economy is in full swing, companies such as Unilumin Technology in the industry have launched customized stall displays in a timely manner The display screen fully reflects the keen market sense of LED display companies. The pioneering spirit of LED display companies in the normalization of epidemic prevention and control has become the key to maintaining the growth trend of the industry.
Recovering market
2020 is the final year of China’s decisive victory in building a moderately prosperous society in an all-round way, and it is also a year of achieving complete poverty alleviation. To achieve this goal, this year’s growth rate should reach 5.6%. It is not difficult to reach 5.6% according to the past economic development speed, but after the sudden outbreak of the new crown epidemic, it will have a huge impact on the Chinese economy. Whether it can achieve a 5.6% growth rate has become the focus of attention and discussion among all parties.
Lin Yifu, Dean of the Institute of New Structural Economics of Peking University and Honorary Dean of the National Development Research Institute of Peking University, said: “It is expected that the second quarter of this year will only be a relatively slow recovery. The annual economic growth may depend on the third or fourth quarter. If GDP growth in the third quarter can rebound to 10%, this year’s economic growth can reach 3% to 4%.”
Lin Yifu also stated that if we want to achieve annual growth of more than 5.6%, we must achieve a rebound of more than 15% in the second half of the year. China is not without this ability, but considering the uncertainty of the global outbreak of the new crown epidemic in the next stage, it should be given to the future. Leave enough policy space in the year.
There are troikas of economic growth: exports, investment and consumption. According to WTO forecasts, this year’s trade may be reduced by 13-32%. Judging from the current development of the global epidemic, it is no longer possible to expect exports to drive the economy this year, and economic growth must rely more on domestic.
According to data released by the National Bureau of Statistics on June 30, in June, the comprehensive PMI output index was 54.2%, 0.8 percentage points higher than the previous month, and the production and operation of enterprises continued to improve. The manufacturing production index and the non-manufacturing business activity index, which make up the comprehensive PMI output index, were 53.9% and 54.4%, respectively, up from the previous month. This shows that the domestic economy has gradually recovered.

For most domestic LED display companies, whether the market is good or not depends mainly on the domestic market. After the first half of the year, high hopes were placed on the development of the second half of the year.
In the first half of the year, LED display screens have made key investments in the conference market, command monitoring and other fields. Many display companies have launched their own products for conference systems. In the command and control field, small-pitch LED displays are also promising. According to the data survey, the mining of public bidding projects on the entire network found that the number of bidding projects involving the command center from January to May this year was 7,362, an increase of 2,256 from January to May last year, and the year-on-year growth rate was as high as 44%. The growth of the center project is undoubtedly a major benefit for the growth of the small-pitch market, and it will bring new increments to the development of the small-pitch LED display market.

In addition, since the outbreak of the epidemic, the cultural and tourism industry has basically been in a stagnant state. It can be said that LED displays have completely entered the “winter” in the rental market, and LED rental display companies have encountered unprecedented challenges. Until May, the Ministry of Culture and Tourism issued the “Guidelines for the Reopening of Theaters and Other Performance Places to Prevent and Control Measures against Epidemics” and other notices, guiding the opening of theaters and other performance venues. This is regarded as the LED display finally ushering in the spring in the field of stage and beauty. Under the guidance of the Ministry of Culture and the brigade resumption guide, venues across the country have been opened one after another, and theatrical performances and competitions have been restarted, which will undoubtedly bring positive confidence to LED display companies and end users and help the recovery of the stage rental market.
According to data released by the Ministry of Culture and Tourism and the Ministry of Transport, during the Dragon Boat Festival this year (June 25-June 27), the country received a total of 48.809 million domestic tourists. The number of tourists this year has returned to the same period last year. The tourism income has recovered to about 30% of last year’s. This is also a positive sign of a very gradual recovery in the tourism industry. The gradual recovery of major domestic economic sectors will also have a significant impact on the development of LED displays in the second half of the year. .

In addition, major exhibitions and exhibitions will be gradually opened in the second half of the year, and large-scale exhibitions closely related to LED displays will be held one after another. All this will show that the LED display market will usher in a “recovery” in the second half of this year. It is true that after the hardships in the first half of the year and active preparations, LED displays will also usher in more intense market competition in the second half of the year. For the vast majority of LED display companies, perhaps the second half of the year will be the real beginning of this year, and they will start again after regrouping!
All in all, the second half of the year is an opportunity for LED display companies, especially in the process of promoting “new infrastructure” in the country, LED displays will definitely have a lot to do. However, we should not be too optimistic about the second half of the year. We need to have a clear understanding. There are still many uncertain factors about economic growth. The aftermath of the Sino-US trade war, the US’s cancellation of Hong Kong’s special status, and the boycott of Chinese goods caused by the Sino-Indian border friction. A series of events may have a certain impact on the development of the entire economy. Therefore, LED display companies need to have firm confidence, but they must make progress while keeping their feet on the ground, step by step.


Post time: Oct-14-2020

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