Development blocked: LED price war diluted industry profits

Chinese LED LED display is the development of the market earlier is larger LED applications. 2008-2010, LED display market sales and sales expanded year by year. Although in 2008, affected by the external environment, LED display market growth rate has declined. However, from 2009 to 2010, with the Shanghai, Guangzhou, the Asian Games and other major events held by the, the rapid growth of the market size of the LED display. 2010, China LED display sales amounted to 9 billion 210 million yuan, an increase of 23.6%.

First half of 2013, the display industry LED Dongguan, can be said to be mixed. On the one hand, benefit from the LED market, LED display is continuously increasing; on the other hand, because of low technical threshold, the price war makes the industry profits have been diluted, triangular debt spread also dragged down the performance of enterprises.

Another LED display enterprises headache is the industry has become increasingly diluted profit. In the LED industry chain, the display is relatively low end of the link, the technical threshold is low, the competition tragic.

Luo song recalled that five or six years ago, the LED display industry gross profit has remained at around 50%, more than 30% net profit, but with the rapid increase in the number of enterprises in recent years, the industry has been less than 30% gross margin, net profit of less than 10%. Sometimes in order to compete for a project, 5% of the profits are also rushing to do. He said helplessly. Market research institutions have done statistics: display do more than 100 million yuan in the country has a total of more than more than and 40, while the net profit of up to 10% of the enterprises rare.

Mr. Shaw a Dongguan LED production company deputy general manager said, at present the LED display industry competition is very serious, the customer demand is very common, some even asked the companies to do a free display, advertising revenue and payment.

It is reported that, LED display manufacturers and advertising media companies, often by LED manufacturers to invest in screen advertising revenue offset payment or advertising into. This way to build a screen looks profitable, but in fact, the cost of risk fell on the head of the LED display business. If the screen does not bring advertising media companies to profit, LED display companies will lose.