There are 3 major logics for the future growth of the LED display market

In recent years, the development trend and demand of the LED display market have been changing, bringing opportunities and challenges. So how can LED companies respond to these changes?

The three major logics for the future growth of the LED display market

Affected by factors such as government budget, price competition and technology competition, the market demand for LED displays in 2024 will be average, but the overseas market will continue to grow, among them, the European and American markets will maintain steady development, and the Asia-Pacific region (especially Southeast Asia and the Middle East) will perform well. In the long run, the LED display market will continue to maintain growth, and the main growth logic includes:

1. Expand from developed economies to non-developed economies. China is the global manufacturing base of LED displays, and it is also the birthplace of LED displays. In the first stage, the development of the Chinese market into the overseas developed economies has been completed. With the continuous reduction of the cost of LED displays, the market has entered the second stage and will continue to expand to non-developed economies.

2.From government and large enterprise customers to small and medium-sized customers. After more than 20 years of development, the price of LED display industry continues to decline, the customer base is gradually expanding, the market is developing from to G to B, and it is possible to expand to C in the future. From the perspective of manufacturers, in recent years, the proportion of distribution and sales models has been rising, and the market demand for channel LED displays has begun to grow. Manufacturers are also actively adjusting their business strategies, laying out channel markets, and establishing a distribution system in China and around the world to cover a wider range of customer groups.

3.Expand from traditional applications to emerging applications. Traditional applications mainly include corporate meetings, security monitoring, retail exhibitions, public areas, transportation, and outdoor advertising. With the advent of Micro/Mini LED technology, the application scenarios of LED displays continue to increase, such as LED all-in-one machines, virtual shooting and cinemas/home theaters, etc., and there is still significant room for growth in the future.

All-in-one machines, virtual shooting, cinemas and other emerging applications of LED are promising

In recent years, the development of LED technology in emerging application fields has attracted the discussion and attention of many people in the display industry.

In terms of specifications, LED all-in-one machines are developing to 135-146 inch 2K 16:9 format, 21:9 ratio is becoming increasingly popular in video conferencing, and 32:9 ratio is gradually increasing in demand for lecture hall applications in European and American markets.

In terms of virtual shooting, although the market size will decline in 2023 due to the impact of the "Hollywood strike" in North America, the market growth trend is still good in the long run. The application of virtual shooting is not limited to film production, but also extends to the fields of advertising, TV dramas and variety shows, attracting more manufacturers to participate. At present, the industrial concentration in this field is relatively high.

In terms of product specifications, the mainstream specifications of virtual shooting background display are concentrated in P2.1 and above, such as P2.3, P2.6 and P2.8. For high-end film and television shooting, due to the requirements for brightness and display effect, P1.2-P1.6 Mini LED display is usually used. As the cost drops, the increase in specifications will also greatly improve the effect of virtual shooting.

In terms of cinemas, there are only about 160 LED movie screens installed in the world, which are not widely used, but the market potential is huge in the future and is expected to usher in explosive growth. However, LED displays still face technical challenges in terms of heat dissipation, power consumption, uneven brightness and darkness, dead pixels, cost and color consistency during maintenance, and these problems need to be broken through urgently.

In addition, with the decline in the price of LED displays, the popularity of the rental market continues to increase, and more live events have begun to adopt LED rental displays to create a cooler visual effect. Combined with the cinematic trend of concerts, the specifications of LED rental displays are also constantly improving.

The competition pattern of the LED display industry has been revealed, and the layout of industrial chain companies has accelerated

In this market context, in the future, manufacturers will face some technical and market competition challenges when developing products with advantages or products with a layout that are in line with the company's development.

From the chip side, Micro/Mini LED display chips will show a rapid growth trend, and the CAGR is expected to reach 78% from 2023 to 2028. Some of these manufacturers have expanded production significantly, and the competition for production capacity between manufacturers has intensified. As more and more manufacturers enter this field, most of them will deploy RGB chip products at the same time, which will intensify the competition of major manufacturers.

In terms of packaging technology, the competition of COB/SMD/MiP technology route is becoming increasingly fierce. It is expected that by 2024, the Mini LED COB production capacity will continue to grow rapidly, reaching 57,600 square meters/month by the end of the year, with a compound growth rate of 64% from 2022 to 2024. At the same time, the shipment of MiP packaging products has also achieved rapid growth, and more and more manufacturers have begun to launch flip discrete devices.

In terms of driver ICs, the market size has been declining since its peak in 2021, and price competition is becoming more and more intense. Despite the high concentration of the LED display industry, the problem of homogenization still exists, resulting in a continuous decline in product prices.

In terms of display manufacturers, although the concentration of the LED display industry is increasing slowly, the prospect of Micro/Mini LED has attracted a large amount of capital to enter. In the future, enterprises will mainly compete in three aspects: regional market, channel construction and product layout.