PCB board prices again! Who is the most stressed in the LED display industry?

At the beginning of July, Shandong Jinbao, Jianye, Mingkang, Weilibang, Jinan Guoji and other companies have issued notices of price increases such as copper foil and copper clad laminates. The price increase is about 1000-2000 yuan per ton of copper foil, and 10% for cardboard. Yuan/zhang, the insulating glass fiber ccl is raised by 5 yuan/sheet, and the sheet is raised by 5 yuan/sheet. Recently, Fujian Mulinsen Lighting, Dongcheng Hongye, Morgan Electronics, Haile Electronics and other PCB companies announced the price increase notice of the circuit board, the increase is almost 10%.

In the price increase notice, the rising costs of sheet metal, labor, and chemicals have become the three major factors in this price increase. In fact, an important factor in this price increase is the change in supply and demand. The popularity and replacement of electronic products has increased the demand in the terminal market, and the downstream small-span LED market has continued to rise, driving demand for multilayer PCBs.

Some accessories displayed by LED, such as PCB board and box, will cause relatively large pollution in the production process, which does not meet the national environmental protection requirements, and has to be rectified and upgraded, which indirectly increases the cost of these accessories. The price increase of raw materials is sneaked into the night with the wind. As early as last year, some accessories began to raise prices. The state has also been carrying out supply-side reforms and is committed to improving the profitability of industrial enterprises. This means that the price increase will be continuous. For the terminal, this is a bad news.

There may also be driver ICs for this price increase. According to industry sources, the wafer is currently in a state of tight supply. With small distances, the strong market demand is not only the orders and profits, but also the constant pressure of raw materials. With the development of touch devices and AI, the demand for wafers will further increase. Wafer production equipment takes half a year from order to delivery, and it takes 3-5 years from construction to production. It is hoped that the supply gap will be solved by expanding production. It is impossible to save the near-fire and will not alleviate the current contradiction between supply and demand. Some insiders predict that the current situation of tight supply and demand will continue until next year, which means that the price increase will continue in a short period of time.

We can't help but think of the price surge of chips not long ago. In May 2016, the chip maker took the lead in launching price increases. At that time, Taiwan’s Jingyuan Optoelectronics released the document in the mainland’s only official distributor, Jingyuan Baochen Optoelectronics, that the price of some series of LED chips will rise. In August of the same year, Sanan Optoelectronics also issued a price adjustment letter, indicating that the price of some small and medium-sized products rose by 10% based on the bottoming out of raw material prices. In addition, the price of some products of first-line and second-line chip manufacturers such as Huacan Optoelectronics has also been raised, and the price increase of products has fluctuated between 5% and 10%.

In 2016, the price increase of the light-emitting chip end was effectively digested in the upper and middle reaches, and no transmission to the application end caused large fluctuations. Even after the year, Ai Biessen opened the price cut-off of the display. Some people think that part of the price increase is due to the obvious overcapacity of the LED chip. After the tragic price war, the price cut was too large, and there was a change in the supply relationship. The price increase is only the price return to rationality, giving the chip maker a reasonable profit. Based on long-term cooperation with downstream companies, the packaging companies did not transfer the pressure of price increases to the downstream, and only some companies raised prices. Just as the price of the Mulinsen RGB display lamp increased by 5% in September, the impact on the application side is not too big.

The price increase has a strong impact on the downstream application side, and the PCB board and driver IC which are close to the application end are coming together. Not only are these pressures in the intermediate digestion less, but these links are relatively thin. . For example, the first board module wholesaler who took over the price increase pressure. As a company with a thin profit, whether to raise prices is a dilemma. If the peers choose not to rise, they will go up, the order will not be there; if they do not rise, every time a module is sold, it will lose a profit or even a cost, and the big reshuffle between the module manufacturers will be opened. . Of course, all of them are happy, all of them are going up, and the pressure is transferred to the downstream application.

For these pressures to turn around, companies that focus on engineering projects and creative displays are well digested. They had a huge profit and were able to absorb the pressure of rising prices. What really hurts is the channel dealers and traders who don't produce their products. Their profits are almost below 10%. After a long game, LED display has reached a very reasonable price, and price increase is a very difficult thing. For companies that do not have a physical industry and do not produce LED displays themselves, this is undoubtedly a bad news. Raw materials collectively raise prices, and display companies must maintain the original price, which has severely squeezed the profit margins of channel dealers and traders, and even jeopardized survival. Once a new round of shuffling is initiated, such a business will most likely become abandoned.

Whatever the reason, the price increase of the PCB board and driver IC has been determined. The only thing the company can do now is to lay the cards in hand and not to make the meat. No one denies that this is a crisis. However, who would not admit that this is not an opportunity? Whether it is price hikes or price cuts, the market will always change. Only with a good hand can we maintain bargaining power and turn the crisis into crisis. For the opportunity.


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