Recently, in the semiconductor field, the world's top three chip resistor manufacturers, Yageo, Housheng, Wangquan, etc., have successively reported the price increase of resistors, with an increase of more than 40%. Yageo Supply Chain pointed out that since March, Yageo has raised the quotations of multilayer ceramic capacitors (MLCC) and chip resistors (R-Chip) by 50% and 70% to 80% respectively. The supply chain end of the LED industry, including electronic components, packaging materials, labor, and logistics, has all seen signs of price increases.

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The voice of the LED display industry about to increase the price is endless. From the upstream chip factory, the midstream packaging factory to the downstream application side, all major manufacturers have maintained a high degree of attention to the market price increase. Among the display manufacturers in the industry, it is even more eager to have clairvoyance and ears to get the latest news at all times.

The industry has never stopped talking about the price increase of LED displays. In recent years, under the influence of the national supply-side reform, the state has vigorously promoted the policy of "three eliminations, one reduction and one supplement" for the five major tasks of reducing production capacity, destocking, deleveraging, reducing costs, and making up for shortcomings, and related environmental protection, monetary policy and many other factors As a result, the prices of raw materials have generally risen, and the prices of products in many industries such as hardware, chemicals, and plastics have risen many times. LED displays involve semiconductors, hardware, plastics and other fields, and are extremely sensitive to market price fluctuations.

However, although the cost of production keeps rising and operating costs such as labor costs continue to rise, the price of LED displays has not risen but fallen, and the price has continued to decline. We say that LED displays are electronic products and follow "Moore's Law", and price reduction is an inevitable trend. However, affected by the epidemic, if raw materials usher in a new round of high price increases, coupled with the tense situation of the LED industry supply chain Next, can the price of our LED display still maintain the current level?

In 2019, under the circumstance of rising prices of raw materials and production and operation costs, some companies raised the prices of individual products, while most kept the prices unchanged through internal digestion and cost savings to avoid the loss of old customers. "Going against the trend", it made an amazing move of price reduction.

From the perspective of the entire LED industry chain, the product prices of upstream LED chips and midstream LED packaging have been on a downward trend in the past two years. In addition, the continued excess production capacity and sluggish downstream demand have greatly reduced profit margins. If there is an "explosive" price increase of raw materials in 2020, LED chip and packaging manufacturers will undoubtedly face greater pressure. Once the price increases, it will be transmitted to downstream applications. In the past two days, there have been rumors of display price increases in the industry.

There is no wind, no waves, and no holes. This year's LED display price increase will be a high probability event. And for most LED display companies, this is tantamount to making things worse!

In the past, LED display manufacturers could save product costs by optimizing product structure, simplifying production processes as much as possible, reducing labor costs, and expanding the output of enterprises to resolve the impact of price increases. Keep the display price unchanged. However, affected by the epidemic, this year's LED display can still offset this pressure through internal digestion, which has to be a question mark.

At present, the resumption rate of LED display enterprises is much lower than that of upstream and midstream enterprises. No orders and insufficient cash flow are the real difficulties faced by most of our small and medium-sized display enterprises!

This round of raw material price hikes is mainly affected by the epidemic, which is a short-term response from the market. The upstream and midstream LED chip and packaging manufacturers may be more willing to increase prices, while most LED display application screen companies maintain a high degree of vigilance and attention. .

Although the domestic epidemic is gradually under control, the current epidemic has spread to six continents and 51 countries in the world. The global pandemic trend is obvious. No one can accurately predict when the LED display market will return to normal in the future. How can LED display companies raise prices in the face of a market that has been severely frustrated?

For the vast majority of small and medium-sized display companies, survival is the biggest and only goal at present! But to resolve the pressure by raising prices is undoubtedly a very simple and rude way to deal with it. This also exposes the problem that our company is still limited to products, has a low level of operating profit, and has been on the alert line for a long time, so it is easy for us to panic about rising prices of raw materials.

In any case, this price increase is the result of the imbalance between supply and demand in the market. It is greatly affected by the epidemic. Even if there is a price increase, it will be short-term. Once the epidemic is over, the market will gradually return to normal levels. LED display companies need not be too nervous. .