How Will the U.S. Tariffs on Chinese Imports Affect the LED Market?

The global LED videowall market achieved revenues of $5.7 billion last year, with year-on-year double digit growth expected out to 2023, according to a new worldwide industry report from Futuresource Consulting. As the U.S.-China trade war intensifies and political indications suggest a continuing period of punitive tariffs, Chinese companies are exploring ways to accelerate their expansion into Southeast Asia, the Middle East and Latin America.

Speaking at the recent Macroblock LED Display Conference in Shenzhen, China, Hope Lee, senior market analyst at Futuresource Consulting summarised global LED display trends and presented on the shifting market landscape.

“Upwards of 500 companies in China have R&D and manufacturing capabilities for LED video wall,” said Lee. “With all this competition, the sector is going into overdrive and vendors are not only considering new international markets, but also placing renewed focus on durability, reduced power consumption and innovation.

“Narrow pixel pitch (NPP) remains a key battleground, with companies migrating more of their products to sub-2.5mm. With stiffer competition, vendors are now focusing on quality as a differentiating factor and our forecasts show that by 2021, NPP will have overtaken LCD video wall in annual revenue terms.”

As international expansion becomes a core business objective for many China-based companies, understanding of local markets is a fundamental requirement. From business culture to channel dynamics and vertical demand, there are many elements to consider for success, beyond securing a local physical presence.

In addition to geographic expansion, many Chinese companies are also focusing on acquisition and business model flexibility, completing a three-pronged strategic assault that is likely to yield strong financial growth.

“As the industry matures, flexibility and versatility are crucial for success, and singular project-based business models will start considering repeat business and run-rate focused activities,” comments Lee. “Vendors with rental specialism are starting to look at opportunities in the fixed installations space. Conversely, companies that have the fixed installation strength are expanding their rental business. It’s all about shaping the landscape to ensure the most viable long-term solution is delivered to the customer.”

Despite wider display industry turmoil, Futuresource says that the LED market will remain resilient over the long term, continuing to outpace growth in LCD and projection, and on track to achieve global revenues of $11.7 billion by 2023, according to Futuresource forecasts.

Futuresource is here.