In the past two months, multiple links in the LED display industry chain seem to have fallen into a "out of stock" state.
In addition to the obvious overcapacity and high inventory of chips, from the end of July and the beginning of August, the RGB devices were out of stock, and then the display spot was regarded as a channel selling point. Until recently, the LED display driver IC was out of stock. Out of stock is widely circulated throughout the LED display industry.
What is the truth?
After investigating many companies in various links of the industry chain, it is found that in fact, the entire LED display from upstream chips to midstream packaging devices to downstream displays is no longer out of stock.
"As long as it is domestically produced on a large scale, chips, RGB lamp beads, and screens will not be out of stock." A person in charge of the packaging factory revealed that even if the RGB out of stock, which was called fiercely some time ago, is only a short time for individual models. The shortage of supply, but it has been resolved quickly, and it is not out of stock.
The person in charge’s views were also recognized by many industry insiders interviewed.
Many interviewees said that starting from July, the LED display market has picked up, and many of the suppressed demand in the first half of the year was released at once, but the production capacity of many packaging and screen factories has remained at a relatively low level. Some were caught off guard.
"In the first half of the year, the utilization rate of many companies was only 50%, but the production capacity was quickly increased. Packaging factories will give priority to supplying large customers." The sales person in charge of a large display company said that the previous short period was somewhat small. The screen factory felt that the supply of individual lamp beads was not so timely, but for the large-scale screen factory, there was basically no shortage of stock.
For channel distributors who use spot as a selling point, the person in charge said that the display is not out of stock. "Many companies or distributors have a sense of lack of stock. It may also be a problem in some areas, but overall the market is not out of stock."
However, many people in the industry agree with the possible future shortage of driver ICs.
"The foundry still relies heavily on Taiwanese factories, which is beyond our control." A senior executive of a display driver IC factory told Gaogong New Display that it is difficult to obtain production capacity even with money or even additional money. Nor does it rule out the possibility of future price increases.
Since the second half of the year, as the domestic epidemic has been basically brought under control, the downstream display application market has also recovered rapidly, and demand has increased significantly.
However, with the recovery of downstream, the price of packaging-related materials including gold, copper, silver paste and precious metals has been rising. This puts greater pressure on packaging companies that have low gross profit.
Recently, it has also been learned from downstream display manufacturers that some packaging manufacturers have already sent price increase notices to the display manufacturers, and most of the increase is generally around 5%.
Many major packaging manufacturers have stated that it is difficult to increase prices, especially for medium and large display companies where the bargaining power of packaging manufacturers is weak.
At the end of 2019, senior packaging companies also revealed that packaging prices will continue to decline in 2020.
It is understood that this year's display packaging production capacity has a certain increase.