LED Display Market Pattern in East Asia

"LED Display Market Pattern in East Asia" Asia's manufacturing industry is still developed in Northeast Asia and Southeast Asia. The current status of LED display manufacturing industry and the distribution of the industrial chain China, Japan, and Vietnam can represent the national image of each historical development stage. LED Display screens are also the most widely used in Japan. Streets and buildings are full of advertisements. In China, LED display screens became popular in the 1990s. Today, LED display screens can be seen everywhere in streets and alleys. Vietnam is a rising star. With the lack of Chinese labor advantages, Vietnam has become one of the new processing plants for labor-intensive enterprises in the LED display heavy industry. According to the market demand and investment consulting report of China's LED display industry from 2016 to 2021, with the continuous development of the LED industry, the number of LED companies is also increasing rapidly. After years of promotion and application, LED display has become the mainstream of the display application market.

With the rapid increase in market penetration in recent years, the price decline of LED display products slowed down in 2016. At the same time, some analysts pointed out that the growth momentum of the market began to slow down, showing the phenomenon of uneven global demand. Japan, the United States, Europe, which are at the high end of the industrial chain, and Taiwan and South Korea, which are in the middle and lower reaches of the industrial chain, are gradually shifting to emerging markets with lower manufacturing costs. In view of the new U.S. President Trump taking office, the industry generally believes that the uncertainty of the U.S. market will increase in 2017, and emerging markets such as Southeast Asia and the Middle East will have great growth potential and will be expected to become battlegrounds. Let’s focus together. In Asia, we will focus on understanding the status quo of the LED display markets in Japan, China, and Vietnam for reference.

Japan's domestic display manufacturing industry is well developed, with a complete industrial chain and advanced manufacturing technology. In the upstream of the industrial chain, there are Nichia Chemicals located in Tokushima Prefecture and Toyoda Gosei located in Aichi Prefecture, two of the famous five major chip manufacturers; in addition, Showa Denko and Rohm Semiconductor are also committed to the development of LED chips, and Toshiba Electronics has also Through the purchase of Bridgelux's patented intervening silicon substrate technology; MOCVD equipment manufacturers include Dayo Nippon Sanso; epitaxial graphite carrier manufacturers include Toyo Tanso and Tokai Tanso. Japan is the most developed country in Asia and the third largest economy in the world due to its small land area, high population density and lack of natural resources, but its local manufacturing industry is highly developed.

It is understood that the nuclear leak caused by the earthquake in 2011 has brought about a subversive change in the Japanese people's view of energy consumption. It is found that nuclear energy is no longer a peace of mind. The urgent need for energy-saving display screens has made the emerging LED display screens come into play. This ushered in the rapid development of the LED industry. In terms of packaging in the midstream, there are Citizen and Sharp, and in terms of packaging materials, there are Shin-Etsu Chemical and Kyocera’s ceramic packaging. In terms of downstream application manufacturers, in addition to Panasonic and Toshiba, light sources also include NEC, Hitachi, Sharp, Mitsubishi, etc., Iwasaki Electric, known as an HID expert, and the rising star Alice; Features: In the field of special display screens, Koito is the leader in automotive lamps, Stanley is versatile, and Ushio Electric is known as the originator of authentic LED filament lamps.

In terms of OLED, Panasonic, Mitsubishi Chemical, Sumitomo Chemical, Idemitsu Kosan, Konica Minolta and Kaneka are at the forefront. Since 2011, LED replacement products have been able to grow at a high speed, occupying most of the display market in less than three years; while LED has the advantages of energy saving and long life, which makes the replacement product market by the end of 2013. Rapidly approaching saturation, the market potential began to turn to the direction of LED integrated lamps. The industrial planning of the Japan Display Industry Association envisages that in 2020, 100% of LED products will be sold in the Japanese display market; by 2030, all display products including market sales and stock use will be LED products.

In general, Japan is currently the developed country with the highest penetration rate of LED display in the world. Although Japan, as a large and powerful country in display product manufacturing, has self-sufficiency, it is still an important market for my country's display product exports. In 2015, my country exported 1.34 billion US dollars of display products to Japan, a year-on-year decrease of 14.2%; among them, LED display products were 570 million, a year-on-year decrease of 6.57%, and the export volume ranked fourth in the export destination country. In 2016, LED display products About 500 million, a further decline year-on-year, still ranking fourth among export destination countries (excluding Hong Kong, which is re-exported).

Japan also has strong product R&D and manufacturing capabilities and complete supporting industries, which also determines that it is a relatively closed market. Stronger international giants PHILIPS and OSRAM failed to really open up the Japanese market, but only relied on acquisitions and joint ventures to enter. In addition, the display product certification system in the Japanese market has its own system (PSE certification), which has strict requirements on electrical safety. For example, LED lamps with external power supplies require Class A PSE diamond certification.

In addition, it is required that the power supply must be an isolated power supply, and there are also patent requirements for the chip and phosphor of the whole lamp. The entry threshold is high, and the requirements of individual customers are also high, but the total volume and profit are considerable, and the reputation is generally good. It is very suitable for enterprises that produce mid-to-high-end products to enter. In terms of traditional light source products, first look at thermal radiation light sources. In March 2010, Toshiba, which produced Japan's first high-energy-consuming product bulb, announced that it would stop producing high-energy-consuming products that it had manufactured for 120 years. The Japanese government has also been committed to high-energy consumption. The work of withdrawing energy-consuming products from the market.

But realistically, high-energy-consuming products are still available on the market. It can also be seen from the export figures that a small amount of high-energy-consuming products are still exported to Japan, and the prices have not changed much. The quantity, amount and unit price of tungsten-halogen lamps basically showed a downward trend. Fluorescent lamps have always been favored by the Japanese market, and whether it is compact fluorescent lamps, straight tubes or circular fluorescent lamps, they have gradually entered the downward channel due to the replacement of LED display products in recent years, and the unit price is basically stable.

Different from the continuous growth of the export of LED display products in China, the LED display products exported to Japan are affected by the weakening demand caused by the economic downturn, the excessive growth base, the market peak change caused by the extension of product life, and the appreciation of the renminbi, etc. The influence of factors, although the total amount is considerable, has shown a slow decline in recent years. In terms of HID, high-pressure sodium lamps are products with a small amount of imports from Japan. On the one hand, they prefer metal halide lamps for outdoor applications, and on the other hand, they are more self-produced and sold; In recent years, the quantity, value and unit price have all shown a significant downward trend, which is also in line with the global trend; metal halide lamps are the products most directly affected by LEDs, and the downward trend of various indicators is also very obvious. To sum up, with the continuous improvement of the cost performance of LED display products, there is a trade-off between them and traditional products. For a long period of time in the future, traditional display products will also coexist with LED display products in the market. , The share of LED display products will increase year by year.

China: The export of products has declined, and indoor is still the mainstream. In terms of display screen exports, after years of rapid growth, China's LED display product exports began to decline in 2016. In the first 11 months of 2016, the cumulative export value of LED display products was nearly 9.4 billion US dollars, a decrease of 2.4% compared with the same period in 2015. It is estimated that the annual export value in 2016 will be about 10.5 billion US dollars.

In the past 2016, the global phase-out of high-energy-consuming products has been accelerated, and LED has become the mainstream light source for display screens. Among them, the output of LED display products in China is about 8 billion, a year-on-year increase of 33%; domestic sales are about 3.8 billion, a year-on-year increase of 35%. The domestic market penetration rate of LED display products (the domestic sales volume of LED display products/the total domestic sales volume of display products) reached 42%, an increase of 10 percentage points from 2015.

Looking at January-November 2016, the European Union, the United States, Japan, ASEAN countries, BRICS countries and Middle East countries are the main markets for China's LED display products export, but the market is hot and cold, and the growth conditions are different. Among them, the growth rate of the US market slowed down to 17%, and its market share expanded by 4 percentage points compared with the same period in 2015; the growth rate of the European Union was 23%; the market in the Middle East rose rapidly, with the highest growth rate of 27%, and its market share was 7%. An increase of 2 percentage points over the same period last year. At the same time, the Russian market has declined severely; the market share of the BRICS countries has shrunk from 7% in the same period of 2015 to 6%;

According to relevant data, in the four years from the beginning of 2012 to the end of October 2016, the average export price of LED display products has dropped by 87.6%. From January to October 2016, the average export price of LED display products dropped by more than 20%. In 2016, the concentration ratio of the top ten exporters was 11%, which was basically the same as in 2015, and the top ten companies and their rankings changed slightly.

Indoor LED displays are still the mainstream products for export. Among the domestic LED display products in 2016, the export volume of bulb lamps ranked first, followed by tube lights, light strips and decorative lights. The market share of several major mainstream products (bulb lamps, tube lights, light strips and spotlights) is gradually shrinking, of which tube lights have decreased by 11.99% year-on-year, spotlights have decreased by 28.98%, and decorative lights, flood lights, flat lights The growth rate is relatively fast, among which the planar lamp has increased by nearly 120% year-on-year. Vietnam: The market is developing rapidly, with both opportunities and risks. According to the Southeast Asia display market report of LEDinside, a division of TrendForce, looking at the LED display industry in recent years, the saturation of mature markets such as Europe, America and Japan has gradually increased, and the Chinese market The price competition is fierce and there are many suppliers.

Therefore, emerging markets such as Southeast Asia, South America, and the Middle East are becoming gold nuggets for many manufacturers to actively deploy. Among them, the Vietnamese market has attracted many foreign-funded enterprises to set up factories due to the low labor cost, and the per capita income is growing year by year, which has the opportunity to drive the local LED display market demand. According to LEDinside's analysis and statistics, among several major Southeast Asian countries, Vietnam's LED display market share has the fastest growth rate, maintaining a year-on-year growth rate of more than 60% in 2013-2015.

By 2016, the LED display market size reached 348 million US dollars, with a penetration rate of over 40%. As the 14th most populous country in the world, Vietnam has a population of 94 million. Currently, half of the total population is under the age of 30, and 60% are of working age.

Human resources are abundant and labor costs are relatively low in Asian countries. Vietnam's usable land resource area is about 34.776 million hectares. From 2011 to 2015, 30.998 million hectares were developed and used, including 130,000 hectares of industrial land, and the rent price of industrial land is about 30-100 US dollars per square meter per year. In addition, the government has been committed to strengthening social and political stability, revitalizing the economy and investment boom, and intensifying efforts to develop infrastructure.

According to the forecast of the Ministry of Planning and Investment of Vietnam, by 2020, Vietnam will need to invest 150-160 billion US dollars in infrastructure construction. In the era of traditional display screens in the past, about 200 million traditional light bulbs were consumed in Vietnam every year, mainly traditional tungsten light bulbs that consume more power. In recent years, Vietnam's traditional display market has continued to decline, while the LED display market has always maintained an upward trend.

Taking into account the growth momentum brought about by government subsidies and rising market demand, the growth rate of LED display penetration is expected to further increase. By 2018, the penetration rate is expected to reach 51%. As for LED display manufacturers, the Vietnamese market is currently dominated by local display manufacturers and European and American manufacturers.

Well-known local display companies in Vietnam include Dien Quang, Rang Dong, Duhal, etc., while foreign companies are mainly Philips, Cara, Eurolight and other companies. Nevertheless, since local manufacturers are mainly concentrated in the downstream lighting assembly field, the industrial chain is obviously lacking, and the overall industrial chain still has a large room for development. However, Vietnam's display market is mainly based on engineering construction projects, mostly from the demand for LED displays in new factories, or part of the government's bids.

Therefore, most of them need to cooperate with local Vietnamese display manufacturers, or set up local assembly factories to obtain bids. Low land, labor costs, and rapid development of infrastructure and political economy have enabled Vietnam to successfully attract new investment in electronics and electrical products. In particular, major Korean manufacturers have deployed production lines in Vietnam one after another, trying to make full use of local resource advantages.

Samsung has successively invested in the establishment of production bases and R&D centers for mobile phones, batteries, electronic components, display screens, household appliances and other products in Vietnam, with a total investment of more than 12 billion US dollars. Currently 50% of Samsung mobile phones are produced in Vietnam. LG is also investing $3 billion in Vietnam to produce OLED display modules as well as products for mobile phones, TVs and other home appliances.

In addition, Seoul Semiconductor and Lumens invested 300 million and 20 million US dollars for production in Vietnam, respectively. Overall, as a fast-growing emerging market, Vietnam's favorable factors in terms of overall economy, infrastructure, resources, etc. are promoting investment in LED display companies and developing the local market. In addition, the consumption power of Vietnamese people is gradually growing. After China and Thailand in the past, Vietnam's domestic demand market has also begun to flourish.

In the early stage, enterprises can promote products through suitable agents, and then build brand awareness in the local area through government support, or acquire local channels through mergers and acquisitions, thereby expanding the local domestic demand market and successfully deploying. .