Affected by the impact of a new round of COVID-19, the recovery of global LED industry demand in 2021 will bring rebound growth. The substitution effect of my country's LED industry continues, and exports in the first half of the year hit a record high. Looking forward to 2022, it is expected that the market demand of the global LED industry will further increase under the influence of the "home economy", and the Chinese LED industry will benefit from the substitution transfer effect. On the one hand, under the influence of the global epidemic, residents went out less, and the market demand for indoor lighting, LED display, etc. continued to increase, injecting new vitality into the LED industry. On the other hand, Asian regions other than China have been forced to abandon virus clearance and adopt a virus coexistence policy due to large-scale infections, which may lead to the recurrence and deterioration of the epidemic situation and increase the uncertainty of resumption of work and production. It is expected that the substitution effect of China's LED industry will continue in 2022, and LED manufacturing and export demand will remain strong.
In 2021, the profit margins of China's LED packaging and application links will shrink, and the industry competition will become more intense; the production capacity of chip substrate manufacturing, equipment, and materials will increase greatly, and profitability is expected to improve. The rigid increase in manufacturing costs will squeeze the living space of most LED packaging and application companies in China, and there is an obvious trend for some leading companies to shut down and turn around. However, thanks to the increase in market demand, LED equipment and material companies have benefited significantly, and the status quo of LED chip substrate companies has remained basically unchanged.
In 2021, many emerging fields of the LED industry will enter the stage of rapid industrialization, and product performance will continue to be optimized. At present, the small-pitch LED display technology has been recognized by mainstream machine manufacturers and has entered a rapid mass production development channel. Due to the decline in the profits of traditional LED lighting applications, it is expected that more companies will turn to LED display, automotive LED, UV LED and other application fields. In 2022, the new investment in the LED industry is expected to maintain the current scale, but due to the preliminary formation of the competition pattern in the LED display field, it is expected that the new investment will decline to some extent.
Under the new crown pneumonia epidemic, the global LED industry's willingness to invest has declined as a whole. Under the background of Sino-US trade friction and the appreciation of the RMB exchange rate, the automation process of LED enterprises has accelerated and the industry's intensive integration has become a new trend. With the gradual emergence of overcapacity and thinning profits in the LED industry, international LED manufacturers have frequently integrated and withdrawn in recent years, and the survival pressure of my country's leading LED enterprises has further increased. Although my country's LED enterprises have recovered their exports due to the transfer substitution effect, in the long run, it is inevitable that my country's export substitution to other countries will weaken, and the domestic LED industry is still facing the dilemma of overcapacity.
Rising raw material prices lead to price fluctuations of LED products. First of all, due to the impact of the new crown pneumonia epidemic, the supply chain cycle of the global LED industry has been blocked, resulting in rising raw material prices. Due to the tension between supply and demand of raw materials, upstream and downstream manufacturers in the industry chain have adjusted the prices of raw materials to varying degrees, including upstream and downstream raw materials such as LED display driver ICs, RGB packaging devices, and PCB sheets. Secondly, affected by the Sino-US trade friction, the phenomenon of "lack of core" has spread in China, and many related manufacturers have increased their investment in research and development of products in the fields of AI and 5G, which has compressed the original production capacity of the LED industry, which will further lead to rising raw material prices. . Finally, due to the increase in logistics and transportation costs, the cost of raw materials has also increased. Whether it is lighting or display areas, the trend of rising prices will not subside in the short term. However, from the perspective of the long-term development of the industry, rising prices will help manufacturers optimize and upgrade their product structure and increase product value.
Countermeasures and suggestions that should be taken in this regard: 1. Coordinate the development of industries in various regions and guide major projects; 2. Encourage joint innovation and research and development to form advantages in emerging fields; 3. Strengthen industry price supervision and expand product export channels
From: Industry information
Post time: Jan-12-2022