Don't just "stare" at the lighting, this LED downstream application area also has a company that earns "pots full of pots"!
The LED downstream applications encompass a wide range of sectors, including display, backlighting, lighting, and more. In 2016, the market size for China's LED downstream sector reached 369.7 billion yuan, with the four main application areas accounting for 12%, 11%, 66%, and 11% respectively. Statistics show that LED lighting dominates as the largest downstream application, followed by the other three major segments.
LED display is one of the key downstream applications after lighting, and it has attracted numerous companies. Among the listed firms, GEM includes leading players like Liard, LianGuang Optoelectronics, ZhouMing Technology, Alto Electronics, Aibisen, and Lehman. The New Third Board also features strong enterprises such as Yuanheng Optoelectronics, LianChengFa, XinYaSheng, Foshan Qingsong, and Huaxia Glorious. Meanwhile, non-listed companies like Shanghai Sansi, Powerful Color, and Austrian Video are also making their mark in the industry.
So far, the first-half results of listed companies have been fully disclosed. According to these interim reports, Liard achieved revenue of 2.512 billion yuan and a net profit of 370 million yuan, further widening the gap with competitors. LianJian Optoelectronics and ZhouMing Technology also performed well, surpassing the 1 billion yuan revenue mark. Alto Electronics saw double-digit growth in both revenue and net profit, while Aibisen and Lehman experienced a decline in net profit.
Among the New Third Board enterprises, Yuanheng Optoelectronics, LianChengFa, Foshan Qingsong, and Huaxia Guangcai all reported growth in revenue and net profit due to the expansion of the display market. However, Qipu Optoelectronics, Diming Technology, and Shenglong shares faced a double decline in performance.
From the first-half results, it’s clear that brand concentration in the LED display market is increasing. Leading brands like Liard, LianJian Optoelectronics, and ZhouMing Technology are expanding their revenue scale year by year, while some smaller companies are losing market share. Additionally, 10 companies managed to achieve revenue growth, indicating positive trends in the sector.
Powerful Color believes that high-density (small-pitch) LED displays are the main growth driver in the market. Although the current pricing remains opaque and commercialization is still in early stages, the company has been actively promoting high-density solutions. They’ve introduced cost-effective DIY options, which they believe will become a trend and a key growth area in the future.
Shanghai Sansi agrees on the importance of small-pitch technology, highlighting its advantages in core technology breakthroughs, high-definition display, and ease of maintenance. These features have helped expand the market, making small-pitch displays an essential choice for security, corporate promotion, TV broadcasting, and conference centers.
Both Shanghai Sansi and Powerful Color expect the small-pitch trend to strengthen in the second half of the year. With continuous technological improvements, falling costs, and product maturity, the LED display industry is growing rapidly. According to GGII data, China's LED display output value is expected to reach 42 billion yuan in 2017, rising to 57.7 billion yuan by 2020.
**Raw Material Prices Rise, Can Price Hikes Be the Solution?**
Price hikes have become a common topic in the LED industry, causing many discussions and concerns. Recently, rising raw material prices have led to market turbulence. For small and medium-sized enterprises, the situation has been particularly tough, with many struggling to stay afloat.
Faced with fierce competition and rising operational costs, many LED display companies have opted to raise prices to maintain profitability. Powerful Color suggests that instead of raising product prices, companies can improve production efficiency through automation and build strategic partnerships to secure high-quality supply chains. This approach helps reduce costs and create value for users.
Shanghai Sansi notes that PCB boards and enclosures used in LED displays often involve environmental issues during manufacturing, requiring upgrades and rectification. This process increases costs, especially with the growing demand for multilayer PCBs in the small-pitch market. While this may affect low-cost manufacturers, large LED producers remain largely unaffected. Companies should respond rationally and seek effective solutions to overcome challenges.
**OLED and MicroLED Pose Challenges for LED?**
Despite the rapid development of solid-state lighting, LED remains a significant player in display backlighting. For over a decade, LEDs have been used in screens, initially in conventional packages and later in chip-scale packages, serving as LCD backlights. However, due to factors like cost and manufacturing feasibility, LEDs have not yet been widely used as direct light-emitting elements in small-pitch displays.
The emergence of OLED and MicroLED technologies has brought new competition to the display field. Many global and domestic companies are investing heavily in these technologies, pushing them into the spotlight. OLED offers self-illumination, wide viewing angles, high contrast, low power consumption, and fast response times. MicroLED, on the other hand, allows independent red, green, and blue light sources, enabling high-contrast, high-speed, and wide-angle displays.
Industry insiders believe that MicroLED has several advantages over OLED, including a wider color gamut, higher brightness, lower power consumption, longer lifespan, and better environmental stability.
Shanghai Sansi acknowledges the rapid development of OLED and MicroLED but notes that they are currently more suited for small screens and wearable devices. Large splicing screens still face technical hurdles. Once the large-screen process for MicroLED is resolved, it could become a strong competitor to traditional LED screens.
However, Powerful Color takes a different view. They argue that MicroLED is still a conceptual product, not yet mass-produced, and lacks real competition. OLED is in its early stages and is far from commercialization. In contrast, LED technology is mature, commercially viable, and continues to dominate the market. In short, LED is still the mainstream, while MicroLED and OLED have a long way to go.
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