A sudden outbreak of novel coronavirus infection pneumonia (COVID-19) swept across the land of China, and major provinces and cities across the country have successively launched national first-level responses. Since the World Health Organization (WHO) announced on January 31 that the new coronavirus epidemic was listed as a “PHEIC”, there have been increasing voices that the epidemic has adversely affected China’s economy. With the spread of the epidemic to many countries in the world, the new coronavirus has a trend of a global pandemic, which has aroused widespread concern among industry players. The dust of the Sino-US trade war has not yet settled, and the new coronavirus epidemic has risen again, and the LED display industry is facing another test. The impact of the epidemic on the industry is geometric, and how should our companies survive this catastrophe steadily has become a problem that many companies at the helm must face. The epidemic is a major test of the company’s ability to resist risks, but also a major test of its overall strength.
To discuss the impact of the epidemic on the domestic LED display application industry, we must first understand the impact of the epidemic on the macro economy. Can the basic economy be stabilized? For this question, Wang Xiaoguang, deputy director of the Economics Department of the Central Party School (National School of Administration) Said, “The impact of the novel coronavirus pneumonia epidemic on China’s economy is a short-term external shock and has little impact on the medium and long-term economic development trend.”
Experts generally believe that the epidemic will have a greater impact on the service industry in the short term, of which the tourism, catering, hotel, and aviation industries will be the most affected; due to the decline in express delivery, commercial retail including online shopping will also be greatly affected . For the industry and construction industry, the first quarter has a slight impact, and it will gradually resume the original growth trajectory in the future.
Although the epidemic will have little impact on the Chinese economy in the medium and long term, the short-term impact still cannot be ignored. It is understood that affected by the epidemic, the Spring Festival holiday is extended, the flow of people is restricted, and the resumption of work in various places is delayed. The epidemic has a great short-term impact on China’s economy. Market entities severely affected by the epidemic are facing greater survival pressure, especially small and medium-sized enterprises. Companies in the manufacturing and service industries deserve special attention.
The decline in consumer demand may cause some small and medium-sized enterprises to have cash flow problems due to lack of orders. At the same time, restricted personnel flow has directly or indirectly led to an increase in logistics costs across the country. While pushing up prices in the short term, it may also affect the supply chain and post-holiday rework of some enterprises, which will increase production costs.
It is foreseeable that under the influence of the epidemic, some small and medium-sized enterprises may be unable to withstand short-term shocks and may go bankrupt. Therefore, large enterprises seeking stability and small and medium-sized enterprises seeking survival will become a normal state during the epidemic.
The sudden epidemic completely disrupted the pace of people’s lives. Different people have different reactions to the epidemic. “House” at home has become the norm for most of us. However, those angels in white clothes who are fighting on the front line do not have “houses”; those who continuously deliver supplies to the frontline of the fight against the epidemic have no “houses”; LED display people do not have “houses”. At critical moments, they have come forward. Contribute to the fight against the epidemic!
On January 28, San’an Optoelectronics decided to donate 10 million yuan to Jingzhou City in the name of “Fujian San’an Group Co., Ltd. and Sanan Optoelectronics Co., Ltd.” to fully support Jingzhou’s new crown epidemic prevention and control work; February 1, Under the instruction and arrangement of Chairman Yuan Yonggang, Dongshan Precision and its subsidiary Yancheng Weixin Electronics Co., Ltd. (representing Yancheng Dongshan Precision Industrial Park) passed the Red Cross Society of Wuzhong District, Suzhou City and the Red Cross Society of Yandu District, Yancheng City. Each party will donate 5 million yuan (total 10 million yuan) to the Hubei Provincial New Crown Pneumonia Prevention and Control Headquarters, which will be specially used for front-line epidemic fight and prevention in Wuhan, Hubei and other places; Unilumin Technology will provide disease control systems, medical institutions, and epidemic District Red Cross and other related organizations donated 5 million yuan, including 3 million yuan in cash and 2 million yuan in global procurement materials; since the closure of Wuhan on January 23, Leyard Group and Fanxing Education Fund have never stopped helping Wuhan. Donated 5 million yuan in materials for the prevention and control of the new crown pneumonia epidemic; Alto Electronics donated a total of 1 million yuan to Wuhan in two batches (On February 18, Alto Electronics donated 500,000 yuan to Wuhan. February 20, Alto Electronics also donated 500,000 yuan to Wuhan through the Shenzhen Aozhi Ai Charity Foundation initiated and established by the company. In addition, a group of companies such as Jingtai Optoelectronics and Chipone North also generously donated their money and contributed their strengths to help. The people in the disaster-hit areas in Hubei demonstrate the corporate social responsibility and the spirit of taking responsibility.
The disease is merciless, and there is love in the world. Mr. Wu Hanqu, Chairman and President of Alto Electronics, said: “It is the wish of all Chinese people to overcome the epidemic. Only when the epidemic is eliminated can China be better and Chinese companies can develop better. As a listed company, Alto Electronics has been actively fulfilling its social responsibilities. , And initiated the establishment of the Shenzhen Aozhi Ai Charity Foundation. All the funds of the foundation come from the donations of the company and shareholders. We must contribute to the country’s fight against the epidemic! There are many companies like Alto Electronics in the industry. And it is the pride of our LED display people”
Since the outbreak of the epidemic, our industry associations have not been idle for a moment. At the beginning of the epidemic, they have paid close attention to the development of the situation. Some member companies have spontaneously donated funds and materials and other deeds in the disaster-stricken areas. They will be announced on the platform of the association to commend and call. Enterprises take action to jointly contribute to the fight against the epidemic. At the same time, the leaders of the association are more actively guiding the enterprises in the industry to prevent and control the epidemic, and conduct a comprehensive investigation on the resumption of work and production in the industry, the difficulties faced by enterprises, etc., to learn more about the resumption of work and production in the industry, and to understand the problems faced by enterprises as soon as possible. Difficulties should be sorted out, and the functions of the association should be brought into full play, communicate with relevant government departments, and feedback corporate demands, so that the state can issue relevant policy support from the policy level.
According to previous years, LED display application companies will kick off the New Year from several major overseas and domestic exhibitions. Participating in international exhibitions is the highlight of LED display companies’ opening ceremony and represents an important journey for display companies to embark on the New Year. However, affected by the epidemic, in addition to the successful holding of the Dutch ISE exhibition this year, several important international LED exhibitions in China had to be postponed. The ISLE 2020 exhibition held at the Shenzhen International Convention and Exhibition Center, the Shenzhen International LED Exhibition, and the organizer of the Beijing InfoComm China 2020 exhibition The information on the postponement of the exhibition has been released one after another. The LED display companies that have been working around the exhibition in the new year in the past have been disrupted, and the original schedule for resumption of work and production has also been forced to adjust.
Since the outbreak of the Spring Festival epidemic, the General Office of the State Council has issued a notice to extend the Spring Festival holiday to February 2. In view of the severe situation, governments across the country have successively issued notices requiring all types of enterprises not to resume work earlier than February 9, followed by the national economy. Major provinces have successively introduced the earliest resumption period for different periods. In extraordinary times, when companies resume work, they will face the test and pressure of returning employees to quarantine, control potential epidemic risks, and health protection.
China’s LED production companies are mainly concentrated in the Yangtze River Delta, Pearl River Delta, Fujian Delta and other regions. The Pearl River Delta is the gathering place for the development of LED display application industries. However, due to strict travel control in various regions, road transportation is subject to different The degree of control not only affects the return of employees, but also affects logistics. A large amount of logistics capacity needs to support the transportation of medical supplies and civilian biological products in Hubei and other places. The materials, procurement and supply of all links in the industrial chain are restricted. The full resumption of work and production of enterprises poses a challenge.
In the early stage, in the absence of masks, medicines, disinfection, and related disease prevention and control treatment materials across the country, many companies and employees were unable to purchase masks at all, and were unable to meet the requirements of local governments. Even if they can meet the requirements, they are subject to local restrictions. Restrictions on management measures and employee return to work are also a major problem. Based on this situation, before February 9th, many display companies have adopted the mode of online work, limited resumption of work, or home office.
In the early stage of the epidemic, through online video conferences, remote training, etc., actively carried out work layout, coordinated partners, maintained customers, and carried out education and publicity work for employees on epidemic prevention and control. For example, Leyard actively responded to the call of the country. It is decided that all employees will work from home from February 3rd to 9th, and companies such as Abison, Lehman, and Lianjian Optoelectronics also started the online office mode during this period.
With the gradual control of the epidemic, travel restrictions in some places have been relatively relaxed, and companies have also made careful arrangements for the prevention and control of the epidemic. After making various preparations for the resumption of work and production, many companies in the industry have begun to have them on February 10th. Order to resume work.
The second wave of resumption of work was ushered nationwide on February 17, and more companies began to resume offline production. From the perspective of resumption rate, the resumption rate of major economic provinces such as Guangdong, Jiangsu, and Shanghai has exceeded 50%, among which large enterprises Compared with the rapid progress in the resumption of work and production of small and medium-sized enterprises, the resumption of work and production of materials related to epidemic prevention and control has achieved obvious results. In the LED display application industry, the vast majority of enterprises are small and micro enterprises, and the resumption rate is slightly insufficient compared with larger enterprises. Although many companies have resumed work, the rate of resumption of work and production is relatively low. Among them, the resumption rate of upstream chip companies and midstream testing companies is as high as 70%-80%, but on the downstream application side, the average resumption rate of work and production is less than half. According to our research, the resumption rate of upper and midstream companies is relatively high. For example, the resumption rate of HC Semitek, National Star Optoelectronics, Zhaochi Co., Ltd. and other companies is as high as 70%. It is expected that full production will be restored from March to April. Downstream display application companies have low resumption of work and production, generally less than 50%. The general resumption rate in February was between 30% and 40%.
HC Semitek is one of the few LED manufacturers that can mass produce red, green and blue light-emitting chips. It has a very important position in the industry. Its registration place is located in Wuhan, Hubei. Since the outbreak of the epidemic, as an LED upstream company, its production and operation are related to The LED shows the stability of the supply chain, but according to the announcement issued by HC Semitek on February 6, its main production and operation are in HC Semitek (Zhejiang) Co., Ltd., HC Semitek (Suzhou) Co., Ltd. and Yunnan Lanjing Technology Co., Ltd. The company currently has no production in Wuhan, and only retains a small number of management and sales personnel. According to our understanding, HC Semitek has started the online office mode before February 10th. By the end of February, the resumption rate of HC Semitek has reached more than 80%. As the domestic packaging leader, National Star Optoelectronics has resumed work. Production is also related to the safety of the midstream link of the display industry. According to public information, the RGB division of National Star Optoelectronics has started online office as early as early February and will officially resume production on the 10th. It is expected that full production will be achieved in mid-to-late March. .
The resumption of work and production of LED chips and packaging is good, and what is really worrying is our downstream application side. LED display companies belong to the “customized meal system”, and customized products are closely related to the order volume. After the exhibition in previous years, companies were able to get a lot of orders, and then drove full power to start production in the new year. However, under the epidemic, the exhibition was postponed, and all LED display-related projects were basically in a state of halt, and many companies resumed work. Production is also an existing order before completion, and no new orders have been added.
In this case, most LED displays will face a tight cash flow problem. As the industry generally adopts a prepayment production model without an order, companies will have a situation of only exporting but not entering. For some OEM-type enterprises, the pressure will be even greater. After all, the landlord’s family has no surplus, so how can OEMs get the rice from the pot?
According to our assessment, if the epidemic is brought under control, the LED display industry will basically be able to return to the state of full production before the outbreak in May to June.
There is an old saying in China that there are pros and cons in everything. In the more popular Western language, when God closes a door for you, he also opens a window for you. This epidemic is certainly a crisis, but so-called crises have always been organic in danger, and danger and opportunity coexist. It depends on how we respond and grasp it.
One thing is basically certain, China is the world’s largest LED display research and development and production country, and my country’s LED display industry has an irreplaceable position in the world. The epidemic will not change the overall pattern of the LED display industry. Its impact on the LED display application industry will be short-term, but its impact may also be far-reaching. However, regardless of the length of the impact, how to survive and smoothly tide over the current difficulties is a top priority for most of our companies. Then, as the current epidemic poses challenges to the production, sales, and even after-sales links of companies, how LED display companies respond to challenges and seize opportunities has become a question for many of our entrepreneurs.
China has the most complete industrial chain and supply chain of the LED display application industry. LED display screens involve upstream chip industry, midstream packaging and terminal application links. Each link is very involved, and almost every link involves raw materials and other materials. Before the level of response is lifted, traffic and transportation are restricted, and logistics are more or less affected by it. The collaboration between upstream, middle and downstream enterprises of the LED display will inevitably be affected. Due to the impact of the epidemic, it is an obvious fact that the procurement demand for terminal applications has been suppressed. In the short term, the pressure on the reduction of demand for LED display terminal applications will gradually be transmitted upwards, and the overall supply chain of the industry is under pressure.
The most worrying thing is that with the outbreak of the epidemic in Japan and South Korea, the development of the semiconductor industry is worrying. In the semiconductor industry, Japan and South Korea occupy a very important position. If Japanese and South Korean companies are affected by this, the production capacity of wafers, capacitors, and resistors will be limited. At that time, the price increase of semiconductor raw materials will be transmitted to the country and may cause The price increase. The pressure of the industrial supply chain will be a fatal blow to small and micro enterprises. After all, small and micro enterprises generally do not have inventory, and under the shortage of resources, suppliers will also give priority to guaranteeing those manufacturers with excellent capital and technical strength. Enterprises may face the situation of “no rice to cook”.
In addition, the chain reaction brought about by this may cause the price of LED display to rise, and there may be a short-term “price increase” in the LED display market this year.
In the current LED display application industry, the upper and midstream companies have a high rate of resumption of work and production, and one of the root causes of the generally low downstream application companies is the lack of orders. No order is the biggest challenge for LED display companies!
Since the outbreak of the epidemic, gathering places such as catering and entertainment have been closed all over the country. However, all group activities involving crowd gathering are in a state of stagnation. As a typical engineering application attribute product, the LED display screen is very heavy. Resumption of work and production Since then, most of the display companies have faced the next situation, and they have been at a loss. They have large scale and comprehensive development companies. Both cash flow and various resources are relatively sufficient. At present, large companies are mainly seeking stability. , While some small and micro enterprises are more tight.
In the production of LED displays, the industry generally adopts the production mode of project advance payment. The company receives a certain percentage of the deposit from the customer, and then begins to prepare for the production. After the goods are delivered, they are also facing the problem of a long payment cycle. This will be a great challenge for some insufficient cash flow, especially for small and micro enterprises.
The development of LED conference system
During this period, we can also see that many companies initially adopted online and remote office models. Through online video conferences and other methods, not only can they reduce gatherings during the epidemic, ensure the safety of employees, but also save money. Many manpower and material resources costs. Some companies even make full use of online remote training and other methods to “charge” dealers during the epidemic to make full preparations after the epidemic.
Therefore, video conferencing is generally regarded as the “new outlet” of the future industry. It is understood that the penetration rate of telecommuting in European and American countries is relatively high. It is estimated that in 2020 about 50% of technology companies in the United States will have about 29% of their employees achieving telecommuting, while the penetration rate in my country is relatively low, and there is huge room for growth in the future. In fact, the development of the LED display conference system in the past two years has become a trend, and companies such as Absen, Leyard, and Alto Electronics have all launched conference-specific display systems. Some display companies have already introduced products such as conference all-in-ones.
Under the epidemic environment, video conferencing highlights the characteristics of efficiency and safety. In the future, with the development of 4K/8k HD and 5G, the development process of video conferencing will surely speed up, and the development of LED displays in the conference system will also be more and more affected. The attention of display companies.
Self-improvement
This epidemic is a test for the R&D, production, management and sales, and after-sales service of LED display companies. It is a test of the company’s anti-risk ability and a verification of our company’s comprehensive strength. The sudden epidemic tests the rapid response ability of our display company and the response mechanism to the crisis. It can reflect the coordination ability between various departments of the enterprise, and the control ability from production to sales.
In a sense, the epidemic is a “mirror mirror”, it will show our company’s true shape, and let us see who we are. Through the epidemic, we can discover our own strengths and weaknesses, especially the decision-making ability of a corporate leader. We can even say that the epidemic is a big test for the head of a company. There is no shortage of business leaders in the industry who are forced to isolate because of close contact. This situation further tests a company’s ability to deal with risks.
Since the outbreak of the epidemic, we can see that all display companies in the industry have taken the lead in the first time, actively organizing epidemic prevention work, and planning for the resumption of work and production. At the same time, the leaders of our display companies also rushed to assist the disaster areas through various methods and channels.
The epidemic allows us to see the responsibilities and responsibilities of enterprises, and it also allows us to discover the deficiencies that exist, and this is an excellent opportunity to improve ourselves. For the advantages, we must continue to carry forward, and for the existing deficiencies, we must strive to change.
Promote the construction of standardization system
LED display is an engineering product, and its customized production mode has always been the main format of the LED display industry. However, we have also seen that in recent years, the standardization process of LED display screens under customization has been steadily advancing, and various standards have been introduced one after another. From technology to products, the industry standard system has become more and more perfect.
In terms of products, such as the standardization of rental products, from the cabinet to the installation, there have been some “conventions and conventions” standards, whether it is the proportion of the product modules, or the practicality and ease of installation and use of the product, the rental Standardization of products is gradually taking shape.
In the LED display application industry this time, the reason for the high rate of resumption of work and production of upstream and midstream companies and the low rate of resumption of production of downstream application companies is that under “customization”, companies do not have an order. Dare to start the production machine. If the standardization of LED displays is achieved, then this problem may not exist.
In recent years, industry associations have been actively promoting the construction of standardization systems, and have successively passed a number of LED display-related standards. After this incident, companies must strengthen their contacts with the association and accelerate our various standardization processes as soon as possible. , To establish a complete standardization system to better serve the industry and develop and expand the industry.
Speed up the process of automation and intelligence
Under the new crown epidemic, LED display application companies will have to face the problem of employee return rate if they want to finally resume work and production. As we all know, the customized process of LED display, even if it is the usual daily operation, is a clear distinction between the off-season and the peak season. There are many orders in the peak season, the factory is busy, overtime work, and many shortages of soldiers and horses occur; and once the off-season comes, the order is single pole The land has been reduced, and many employees of the company have begun to face the situation of “nothing to do”. Therefore, promoting standardized production and increasing the degree of automation and intelligence will undoubtedly be the solution to saving enterprise costs and improving production efficiency. This epidemic may accelerate the process of automation and intelligence for enterprises.
Firm confidence-good prospects for the development of the LED display industry
The sharp edge of the sword comes from sharpening, and the fragrance of plum blossom comes from the bitter cold.
Most of the LED display companies have gone through ups and downs in the fierce market competition. Although the impact of the epidemic is great, it does bring many challenges to our companies. However, for most display companies, this is just an unexpected storm, and after the storm, there will be a brilliant rainbow.
As of 20:00 on March 1, Beijing time, 61 countries and regions outside China have reported a total of more than 7,600 confirmed cases of new coronary pneumonia. Except for Antarctica, all other 6 continents have been covered. The World Health Organization did not say that the pandemic is hoping not to cause panic, but as it stands now, the epidemic has actually spread completely across the world. China’s LED display is marketed globally. From last year, about one-third of its products were exported. Faced with this situation, many business people are pessimistic about this year’s development. For many companies, the aftermath of the Sino-US trade war has not disappeared, and the sudden epidemic is tantamount to worsening the situation. However, the more such times, the more we must strengthen our confidence.
Although under the influence of the epidemic, most of the LED display-related engineering projects are in the same stagnant state, but we all know that once the epidemic passes, these suppressed demand will be released, and the market may be Usher in a wave of retaliatory growth.
For most LED display companies, the domestic market is still the most important. Despite the emergence of the new crown pneumonia epidemic, 2020 is a critical year for my country to build a well-off society in an all-round way. National policies will not change. In the face of the short-term blow of the epidemic, the country must then introduce relevant policies to stimulate economic growth. According to the Daily Business News report, as of March, 15 provinces in China, including Henan, Yunnan, Fujian, Sichuan, Chongqing, Shaanxi, and Hebei, have launched investment plans for key projects. The investment scale in 2020 will exceed 6 trillion yuan, which will be announced simultaneously. 9 provinces with a total investment scale of more than 24 trillion yuan. The total planned investment in 9 provinces is 24 trillion!
In fact, since the outbreak of the epidemic, LED display companies have not been fighting alone. Recently, local governments have introduced relevant policy support. Local governments in Beijing, Shanghai, Suzhou, Shenzhen and other local governments have introduced relief policies, such as reducing or exempting corporate water and electricity charges and reducing levies. Social security expenses, lower corporate income tax rates and many other measures to benefit enterprises. As an enterprise, we must always pay attention to the changes in relevant national policies in order to obtain greater subsidies.
In the face of the epidemic, no company can take care of itself, and no company can deal with it alone. We can only keep warm and overcome the difficulties together, but in the final analysis, the most important thing for our company is to have confidence.
I believe that the cold winter will eventually pass and spring will finally come!
Post time: Sep-16-2020