In the first quarter of 2022, the global LED display market shipments fell by 22.3% month-on-month. According to the seasonal characteristics of the Chinese market in the past, the shipments in the first quarter were the lowest, and the shipments in the fourth quarter of each year were the highest. Because the Chinese market has a high global share, the overall market follows the seasonality of China. However, from the shipment situation in the first quarter of 2022 due to seasonal lows and epidemic prevention and control restrictions, China’s market share fell from 64.8% in the previous quarter to 53.2% in the first quarter of 2022.
Since the global spread of the novel coronavirus in the second quarter of 2020, China has steadily occupied more than 50% of the LED display market. Although the first half of the year is a traditional low season, China can still maintain a market share of about 50% and account for more than 60% of the market share in the second half of the year. In fact, in the fourth quarter of 2020, where it held the highest market share, it even reached 68.9%.
However, in the first quarter of 2022, in addition to seasonal factors, the epidemic prevention policies of local governments restricted the flow of personnel in the industry, reduced logistics capacity, and increased logistics costs, resulting in longer business processes and order cycles. Problems such as the inability of the outgoing goods to go out, and the inability of incoming parts to come in occurred frequently in March and April. As the prevention and control measures are implemented in important cities such as Shenzhen and Shanghai, the transportation of products and parts between these cities and surrounding cities has become difficult, and even if the transportation is completed, installation and commissioning will not be so easy. At the same time, some government projects and enterprise projects have been tilted toward epidemic prevention as the capital budget, resulting in repeated reductions in project demand. In the fourth quarter of 2021, China’s market share rose to 64.8%, but fell sharply to 53.2% in the first quarter of 2022.
Major brands increase sales abroad
Under such circumstances, major Chinese brands have once again turned their attention from the Chinese domestic market to overseas markets to ensure the scale of sales. Leyard continued to develop overseas sales channels and successfully opened the Latin American market this quarter. It installed more than 3,000 square meters of LED display products in the Brazilian market, mainly used in corporate channels. Almost all Chinese brands including Unilumin, Absen Lianhe and Lehman have gained market share in North America. Through communication with local channels and dealers, we learned that although there are still high freight rates and tight transportation capacity in North America, the market demand is positive and optimistic.
Small pitch LED display is the key to the overall growth of the LED display market
It can be seen from the shipment status of various brands that the growth engine of the entire LED display market is smaller pitches below 2mm. In the first quarter of this year, the global sales of small-pitch products increased by 30.7% month-on-month, but increased by 40.3% year-on-year. At the same time, excluding the Chinese market, the small-pitch products even achieved a month-on-month double growth, 2.6% and 94.7% respectively. Among them, in North America, Western Europe and Asia Pacific, the shipments of small-pitch products increased by 119.5% in North America, 91.1% in Western Europe, and 70.6% in Asia Pacific. It is worth noting that for the first time since the third quarter of 2020, Samsung has regained the first share in the small-pitch market display market excluding China.
Without preparation, every brand will face some difficulties in the face of increasing uncertainties inthe global market.
However, amid the highly unstable torrent of the entire market, the growth momentum of small-pitch LED display products does not seem to be enough to further boost the LED display market. China’s epidemic clearance policy is expected to affect not only the first half of 2022, but also the second half of 2022. The war between Russia and Ukraine has already cut sales of Absen and Unilumin, the No. 1 and No. 2 market share in the region, by more than half in the first quarter, and the second quarter is expected to lead to more negative growth in Eastern Europe. In addition, rising inflation in each country is expected to cause delays or reductions in investment by governments and businesses in commercial display upgrades and additions. Although compared with LCD (liquid crystal) display products, the shipment performance of LED displays in the first quarter was relatively better, but this negative impact and uncertainty may bring unexpected difficulties to the LED display market. Therefore, each supplier needs to make more sensitive and timely adjustments to changes in each market in the coming time.
Post time: Jun-21-2022
