Upstream materials determine the price fluctuations of LED screens. Recently, there has been news of an increase in the price of LED screen circuit boards. This is another blow to the already fierce competition in the LED screen market. How LED screen manufacturers and the following engineering customers can survive the difficulties will be the A big test. Although it is said that there are ups and downs in line with market laws, the LED screen market will be even worse. At the beginning of July, Shandong Jinbao, Kingboard, Mingkang, Wei Libang, Jin'an Guoji and other companies successively issued price increase notices for copper foil and copper clad laminate. Yuan/sheet, insulation glass fiber ccl increased by 5 yuan/sheet, sheet metal increased by 5 yuan/sheet.
Shenzhen LED Screen Network learned that recently, many PCB companies such as Mulinsen Lighting, Dongcheng Hongye, Morgan Electronics, Haile Electronics, etc. have issued notices of circuit board price increases, and the increase is almost all 10%. In the price increase notice, the rising costs of sheet metal, labor, and chemicals have become the three major factors for this price increase. In fact, an important factor in this price increase is the change in supply and demand.
The popularization and upgrading of LED screens have increased the demand in the terminal market, and the downstream small-pitch LED screen market has continued to rise, driving the strong demand for multi-layer PCB boards. Raw materials are "rising", who is the least calm in the LED screen industry? Shenzhen LED Screen Network learned that in the price increase notice, the rising cost of plates, labor, and chemicals has become the three major factors for this price increase. In fact, an important factor for this price increase is the change in the supply and demand relationship of raw materials for LED screens.
This means that price increases will be continuous. For terminals, this is bad news. Some accessories of LED screens, such as PCB boards, cabinets, etc., will cause relatively large pollution during the production process, which does not meet the national environmental protection requirements, and has to be rectified and industrially upgraded, which indirectly increases the cost of these accessories.
The price increase of LED screen raw materials sneaks into the night with the wind. As early as last year, some accessories began to increase in price. The country has also been carrying out supply-side reforms and is committed to improving the profit level of industrial enterprises. This means that the price increase of LED screens will continue.
For terminals, this is bad news. We can't help but think of the wave of chip price increases not long ago. In May 2016, major chip manufacturers took the lead in raising prices. At that time, Taiwan’s Epistar Optoelectronics, the only official seller in the mainland, Epistar Baochen Optoelectronics, issued a document stating that the prices of some series of LED chips would increase.
In August of the same year, Sanan Optoelectronics also issued a price adjustment letter stating that based on the bottoming out of raw material prices, the prices of some small and medium-sized products rose by 10%. In addition, the prices of some products of first-tier and second-tier chip manufacturers such as Huacan Optoelectronics have also been raised accordingly, and the increase in product prices fluctuates between 5% and 10%. There may also be driver ICs for this price increase.
According to industry sources, wafers are currently in a state of tight supply. Small-pitch LED screens are in full swing, and the strong market demand brings not only orders and profits, but also a steady stream of raw material pressure. With the development of touch devices and AI, the demand for wafers will further increase.
Wafer production equipment takes half a year from placing an order to delivery, and 3-5 years from construction to production. It is hoped that the expansion of production will solve the supply gap. Some insiders predict that the current situation of tight supply and demand will continue until next year, which means that the price increase of LED screens may continue in a short period of time. The price increase of the LED screen industry this time has a strong impact on the downstream application end. The PCB board and driver IC that are relatively close to the application end come together. Relatively thin.
For example, the wholesaler of unit board modules who were the first to take over the pressure of price increases. As a company with thin profits, whether to raise prices is a dilemma. If the peers choose not to go up and go up by themselves, there will be no orders; if they don’t follow up, every LED module sold will lose a profit or even cost, and a big reshuffle among module manufacturers will begin. up.
To everyone's satisfaction, of course, everything is up, and the pressure is transferred to the downstream application side. In 2016, the price increase on the light-emitting chip side was more effectively digested in the upper and middle reaches, and it was not transmitted to the application side to cause major fluctuations. Even after the year, Absen opened the prelude to the price reduction of the display screen. Some people think that part of the price increase is due to the obvious overcapacity of LED chips before. After the tragic price war, the price cut was too large, and there was a change in the supply relationship at that time.
The price increase is just a return to rationality in prices, giving chip manufacturers reasonable profits. Based on the long-term cooperative relationship with downstream companies, packaging companies did not transfer the price increase pressure to the downstream, and only some companies raised prices. Just like Mulinsen raised the price of RGB display lamps by 5% in September last year, the impact on the application side has not been too great.
Shenzhen LED Screen Network learned that no matter what the reason is, the price increase of PCB boards and driver ICs has been confirmed. The only thing companies can do now is to play the cards in their hands and not to do nothing. No one denies that this is a crisis. However, who would deny that this is not an opportunity? No matter whether it is a price increase or a price reduction, the market will always change. Only with a good hand can we maintain the bargaining power and resolve the crisis for opportunity. Companies that focus on engineering projects and creative displays can easily digest these pressures.
They already have huge profits and are fully able to absorb the pressure brought about by rising prices. What is really sad is that the distributors and traders who do not produce their own products, their profits are almost all below 10%. After a long period of gaming, LED screens have now reached a very reasonable price, and it is very difficult to raise the price.
This is undoubtedly bad news for companies that have no physical industry and do not produce LED screens themselves. The price of raw materials has increased collectively, while LED screen companies have to maintain the original price, which has seriously squeezed the profit margins of distributors and traders, and even endangered their survival. Once a new round of reshuffle starts, such LED screen companies will most likely become outcasts.