Leyard Leads The Price Hike

On May 17, Riad issued the notice of global price increase for LED display products, "in view of the increasingly tight supply of upstream main raw materials (semiconductor chips, lamp beads, PCB, etc.) and the substantial increase in costs, Riad will comprehensively increase the ex factory price of products in the world from now on." One stone aroused a thousand waves, which immediately caused a huge repercussion in the industry.

A variety of factors lead to price increases, shortage is one of the main reasons for price increases.

As we all know, the outbreak of the epidemic last year made the manufacturing industry, including the LED display industry, face a huge test. As COVID-19 blocked the global trade chain, resulting in the global raw material supply and demand market disorder, and the supply of materials tilted to the epidemic prevention area, the global freight container market became "one cabinet hard to find", and the freight rate also climbed steadily. The supply and demand contradiction has not yet been completely alleviated.

Secondly, affected by the rising prices of large integrated commodities, raw materials such as copper, aluminum and iron all rose by more than 30% in the world. This rise in raw materials has caused a huge impact on LED display screen supply chain manufacturers, and enterprises in various related fields have raised their prices one after another, leading to further transmission of cost pressure to LED display screen manufacturers.

The biggest impact on the price of LED display is the global "lack of core" crisis. LED, as a semiconductor industry, is also affected by the global chip shortage. Due to unreasonable pressure on Huawei in the United States and other western countries, the supply of semiconductor chips has been disordered. In addition, with the rapid development of 5g and intelligent automobile industry in recent years, huge demand for chips has been put forward, which leads to global chip shortage, and also occupied the capacity originally belonging to LED chips, which leads to the shortage of chip capacity for LED and the explosion of wafer price. The increase of chip price directly leads to the price increase of packaging manufacturers and drive IC manufacturers. The cost of lamp beads and IC accounts for more than 70% of the display screen, which also makes LED display manufacturers bear great pressure.

What is the effect of price increase?

Although the price rise can temporarily relieve the cost pressure of some enterprises to a certain extent, it has adverse effects on the expansion of LED display application industry. After a period of market cultivation, LED display application market is in the stage of rapid development, especially in the alternative market of some competitive display projects, the advantages of LED display have become more and more obvious. In recent years, following Moore's law of semiconductor, the price of LED display has continued to decline on the basis of improving the effect, and there is no big price gap with relevant competitors in some display fields. If the price rises rashly at this time, it may dampen the enthusiasm of the market and affect the market expansion.