LED display industry has a strong development momentum and has become the second largest segment of LED industry after LED lighting.
According to statistics, in 2017, the global LED display (including display screen and other backlight products) of the size of the market has reached $13.5 billion, according to the forecast, the future of a period of global LED display market demand will continue to maintain rapid growth, the average annual growth rate of more than 20% over the next five years, predicts 2023, the global LED display market will be worth $35 billion.At the same time, China is the most important manufacturing base in the supply side of the global LED display market. In 2017, the export volume of LED display (including display screen and other backlight products) in guangdong province alone reached 18.533 billion yuan, up 35.58% year on year.
When seeing these big data, many people may still be complacent about the promising prospects of LED display. However, overcapacity has become a major obstacle in the LED display industry. However, what is the cause of overcapacity in LED display?
Fake and low price promotion
Good things always attract people to swarm.LED display is a new industry advocated by the country, but most of the "pioneers" here have not tasted the sweet, but become the pioneers on the road to fight.
LED display industry access threshold is very low, many small, small workshop enterprises can easily enter.However, these enterprises who only want to "make a profit" did not take technology research and development as the guide after entering the market. Facing the fierce competition in the market and the pressure brought by the rising cost of raw materials, these enterprises do not hesitate to sacrifice quality and blindly rely on price war for competition.This kind of blind entry and low-end competition leads to the disorder and difficulty in managing the LED display market.
Policy favorable fiscal subsidies
In fact, LED enterprises‘ continuous enthusiasm is largely due to the increasing support from national and local governments for the industry.
In 2009, the national development and reform commission and other six departments jointly issued the opinions on the development of semiconductor lighting energy saving industry;In the same year, the ministry of science and technology launched the "ten cities and ten thousand lamps" semiconductor lighting application demonstration city program;In May 2011, 16 cities including Beijing, changzhou, hefei, Qingdao, guangzhou, haikou and baoji were identified as the second batch of "ten cities and ten thousand pieces" demonstration cities.In November the national development and reform commission issued a roadmap for phasing out incandescent bulbs.On February 24, 2012, the ministry of industry and information technology released the 12th five-year development plan for the integrated circuit industry.
Local governments are also enthusiastic about the LED industry. They have invested a huge amount of money to implement substantial preferential policies for the LED industry in land, taxation, technology development, talent introduction, equipment purchase and other aspects.
In addition, the subsidy policy has also attracted many people to join the LED industry. The ministry of finance and other three ministries and commissions launched the 2012 financial subsidy promotion project bidding for LED products, involving 4 types of indoor and outdoor LED lighting products. The subsidy funds are indirectly subsidized.According to people familiar with the matter, the subsidy proportion is about 30% of the purchase price, and the total amount is expected to reach hundreds of millions of scale, which will effectively leverage LED applications in lighting, especially for bulk users.
In the face of overcapacity, led screen enterprises and how to break through the siege?
First, accelerate structural adjustment and transformation of the development model.We will adjust the structure of industries and products, actively develop production capacity in line with market demand, and shift from scale expansion to quality and efficiency, so as to raise the overall level of industrial development.
Second, we need to give full play to the guiding and restrictive role of planning, policies and standards, tighten market access conditions, strengthen industry access management, improve the industry monitoring system and the early warning system for overcapacity, and strengthen and improve industry management.
Due to the low entry threshold of LED industry, in the past few years, a large amount of capital has poured in, leading to oversupply and gross profit margin at all ends of the industrial chain dropping sharply. Many manufacturers are facing losses or even elimination.According to incomplete statistics, 4,000 LED enterprises disappeared from the market in 2016.In 2017, the supply and demand of LED industry will ease, and the phenomenon of overcapacity will become more and more obvious.Rectification of industry competition mechanism and improvement of industry standards are related to the survival of most LED enterprises in the future.
Finally, we should promote merger and reorganization of the industrial chain and accelerate the elimination of "bad" enterprises.
"Inferior" to take up a lot of social resources, but to create out the corresponding social value, accelerated to such enterprise merger and reorganization of social resources, can effectively release the usage at the same time can maximize the enterprise‘s social value advantage: let the advantages of advanced technology, productivity and management level to promote the orderly development of LED industry.At the same time, effective merger and reorganization can balance the supply and demand relationship of the market from the source, so that the market can really guide the direction of industrial development.
LED overcapacity is a double-edged sword.Excess capacity will bring about a series of problems, such as price war, business failure and so on.Overcapacity will also prompt reshuffling of low-end and medium-end enterprises. Some enterprises with substandard quality, weak capacity and weak financial strength will gradually withdraw from the market, leaving behind large enterprises with strong strength.
When the waves rush against the sand, the strong stay behind.Faced with the problem of overcapacity, LED display industry needs to strengthen its own technology, continuous reform and innovation, and enhance its strength to withstand the storm.