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Under the influence of the global macroeconomic situation, the harvest of the LED industry in 2022 is "not ideal", and the market situation of the whole year revolves around price reduction and income reduction. However, this does not prevent the LED display industry from further investing in technological innovation and industrial integration, and even promote the restructuring of the industry's "capacity and camp" from a certain point of view. On this basis, the LED industry will enter a new stage in 2023, especially the "camp" debate around display applications.
Industry integration accelerated under the adverse situation
In 2022, the development characteristics of the LED industry are concentrated in the following:
1. The demand side is restrained. Including lighting demand and display backlight demand, the market will shrink to varying degrees in 2022. This has greatly affected the stability of the industry's supply chain, and led to 2022 once again becoming the year of industry price reduction. This year, a large number of upstream and midstream enterprises and lighting products enterprises in the industry reduced their income in 2022, or even turned profits into losses.
2. Supply-side innovation is in the "early stage of marketization", and has not significantly increased the total demand of the industry. For example, micro LED display technology has achieved further technological breakthroughs, such as the introduction of P0.4/p0.3 products, but has not achieved scale application; The market scale of LED all-in-one products such as conference rooms is still small; The increment of new scenes such as vehicle-mounted, mini LED new backlight, plant factory lighting and other scenes cannot effectively make up for the shrinking demand of traditional lighting, LCD backlight, cultural tourism and advertising market - that is, the increment of innovation is not as large as the decrement of traditional popular products.
3. The industry leader is optimistic about the growth of new LED application products in the future. Including mini LED backlight and micro LED direct display products are receiving more R&D investment and capital support. Among them, there are three representative industrial integration cases in the domestic industry, including Guoxing Optoelectronics integrating Dongshan precision packaging capacity, Hisense entering into Qianzhao Optoelectronics, and BOE entering into Huacan Optoelectronics. These three events have greatly changed the competitive pattern of the "industry camp".
On the other hand, in 2022, San'an Optoelectronics, as the global leader of LED industry, will complete a new round of capital operation, and the new capital of 7.9 billion yuan will increase the construction of micro LED product line; Konka's Chongqing LED base was officially put into production. The MLED chip production line has mass produced Mini LED chips. It has continued to be used internally and began to sell externally. It has entered the process of ramping up production capacity, and the micro LED massive transfer line has also entered the stage of business expansion; The COB test and epitaxial chip project built by Hi-Tech Group with a total investment of about 10.5 billion yuan has entered the construction stage... Some industry studies believe that in 2022, the investment in Mini/Micro LED will exceed 70 billion yuan - the LED industry trough in 2022 will not hinder the industry's investment and innovation enthusiasm.
Insist on investment at the low point, and the leading enterprises consolidate their leading advantages with greater investment. Under the situation of continuous industry cooperation, industry insiders believe that this is not only a long-term good view of the LED industry, especially the LED display industry, but also will gather greater "capacity competition pressure" in the next few years. The latter may appear in 2023.
The competition of LED display industry entered a new stage
"The LED display terminal market before 2018 only belongs to the LED industry chain; however, after 2018, as more control room equipment enterprises, commercial display enterprises, color TV enterprises and IT enterprises enter the LED display terminal market, LED display products have spread and belong to the entire display industry camp". That is, in the past few years, LED display industry not only has some small and medium-sized brands been eliminated under the fierce competition and the improvement of technology threshold, but also has a large number of more "brands" represented by IT and color TV brands. This makes the competitive landscape of LED display industry more complex.
With the entry of BOE and Hisense into the LED industry chain in the middle and upper reaches in 2022; Konka's independent LED upstream and middle capacity construction has entered the mass production stage; The LED represented by the color TV camp shows that the new forces will reach an unprecedented level in the deep integration of the industry chain. This will also be in contrast with the traditional LED display products. Most enterprises follow the three-stage industrial division pattern of "upstream chips, midstream packaging, and downstream terminals".
That is to say, the integration of LED display industry in 2022 will further break through the traditional paradigm of "upstream and downstream ecological cooperation", and form more vertical integration with direct and more brutal capital means, which will bring two major changes in the industry competition pattern: first, the voice of color TV and panel industry enterprises in LED core resources, technology and innovation will enter a new stage of continuous acceleration and enhancement, and the competition between different camps of terminal products, Introduce more upstream resource competition factors to which they belong; The second is that the LED display industry chain has officially stepped into a new stage in which the horizontal division of labor and the vertical integration of the industrial chain coexist from the horizontal division of labor, and the collision of the two industrial ecological patterns will also be strengthened.
"There will be qualitative changes in the depth and breadth of the contest between different camps". Industry insiders believe that after the tide of industry integration in 2022, the scale of industry competition in 2023 will inevitably enter a "turning point": among LED display brands, more attention will be paid to the competition of comprehensive strength, scale strength and industrial resource integration strength, which will be as important as and even more important as the traditional channel capacity, price competition and technological innovation competition.
More enterprises face the strategic choice of "horizontal and vertical"
In the new round of LED industry upgrading in the world, we will continue to maintain the leading position. It is certainly the focus of competition in the LED industry, especially in the display industry, to increase the research and development of new technologies. However, in addition to this, some other key strategic directions, especially the "horizontal and vertical" strategy of terminal brand growth, also deserve attention:
For example, horizontally, the relationship between LED display and traditional flat panel display, and even silicon-based micro-display, is becoming a "substitutive competition" relationship from different scenarios. This is also the reason why IT and color TV display enterprises introduced LED product lines. Most of the IT and color TV companies are LCD business display, LED business display and other technology lines. In terms of product supply, LED professional display brands in a narrow sense have competitive advantages. The control room enterprises such as Weichuang, Dahua and Haikang adhere to the rich layout of LCD, DLP, LED and other product lines, and have unique characteristics in comprehensive competition.
For example, vertically, more LED terminal enterprises have a "vertical industrial chain structure". For example, Lyad entered the packaging industry chain; Konka is also independent in building a complete vertical industrial chain system from chip to terminal; Through capital operation, BOE and Hisense have also opened up the links of the chip and packaging industry chain... "The era of massive transfer of micro LED is changing the industry ecological structure of 'terminal brands purchase packaged lamp bead manufacturing display units' in the era of surface mounting technology".
It can be seen that in both horizontal and vertical directions, LED display industry enterprises, especially the traditional brands focusing on LED display products, are facing some major choices: whether to introduce a richer supply line such as LCD business display, and how to build a more stable industrial ecosystem in the middle and upper reaches, which is closer to the core technology innovation, are becoming a must answer question with a sense of urgency.
On the whole, the consensus in the industry is that the demand for LED display will be larger in the future, and the product form will also be more diverse (covering the richer scene demand from micro display to large screen); However, even so, it does not mean that the "number of brands" of LED display industry today is limited - on the contrary, under the larger scale demand, the scale competitiveness of the industry will inevitably lead to the aggregation and integration of terminal market share: the number of LED display terminal brands today is not insufficient, but may have shown an excess state.
If, combined with the integration of specific application scenarios, display terminals and "software and information system for business needs", LED display enterprises' comprehensive solutions and the competitive test of customers' in-depth service capabilities, it can be said that LED display industry is a three-in-one battlefield of "great innovation, great opportunity and great challenge". This battle is likely to start with the continuous layout of the color TV series in the upstream resources in 2022, and launch a "more in-depth" competition battle.