Although the small-pitch market capacity continues to grow. Although from doubling in 2014, to 87% in 2015, and the current 60%, the growth rate is declining. However, in terms of absolute increase in scale, the application of small-pitch LEDs is still in an "explosive period." In fact, as long as the industry growth rate remains above 41.5%, small-pitch LEDs can maintain the "double absolute increase." This rate can be maintained for at least 2 years.

    In the first half of 2016, some small-pitch LED companies had a bumper harvest, but some companies entered a dilemma. Why are some small pitches selling big, but the overall market penetration rate is not ideal? When we think about this issue, we have already paid attention to the research of small-pitch business models.

    In the display market in the first half of 2016, small-pitch high-definition large screens are undoubtedly the mainstream of the market. Several large-scale backbone enterprises in the industry are seizing this blue ocean market in real time. For a long time, an important reason why LED displays cannot compete with commercial large-screen products represented by liquid crystals is the gap in display effect. With the introduction of high-density and small-pitch LED products, this shortcoming has been made up to a large extent. It is precisely because of this that the LED display has begun to have high-profile confidence.

    Although the camp of manufacturers involved in small-pitch LED displays is growing rapidly and product upgrades are also accelerating, the market scale is still very limited from the application level. It is foreseeable that after the production scale reaches a certain level, the expansion of the application market will become the highlight of the industry's development. So, where are the potential application markets for this industry that is favored by many companies?

    Target positioning indoor large-screen commercial display

    At the beginning of its birth, the small-pitch LED display has been regarded by traditional LED companies as a magic weapon to break the limitations of outdoor LED display applications, looking forward to a share of the indoor commercial display market, which has never been involved but has a broad market prospect. It is undeniable that compared with the traditional indoor large-screen splicing, the small-pitch LED display does have certain advantages, (for example, compared with LCD splicing screens, it has incomparable seamless advantages; compared with DLP splicing screens , Its application form is more flexible, and it can be equipped with trendy technologies such as touch, naked eye 3D, 4K, etc. according to application requirements). However, as an emerging technology, the small-pitch LED display also has certain shortcomings, (for example, it cannot compete with the cost advantage of LCD splicing, and it is still not comparable to DLP splicing screens in terms of screen detail, and there are also high costs. problem). This coexistence of advantages and disadvantages is destined to have both opportunities and challenges for the application of small-pitch LED indoor commercial display applications.

    In the indoor large-screen commercial display market, the application of LCD splicing and DLP splicing has been very mature, covering the mid-to-high end. Therefore, for the "fledgling" small-pitch LED display, there is only a blank market, but there is almost no blank. If you want to gain market share, you can only "take food from the tiger's mouth" and directly confront the LCD splicing and DLP splicing. The difficulty is obvious.

Small-pitch LEDs have the following three trends:

    1. Prices fall

    First, in the context of intensified market competition and declining prices, the net profits of industry-leading companies basically doubled in the first half of 2016. The price drop is the main development trend of small-pitch LEDs in the past three years. It is also the reduction in prices that has contributed to the continuous expansion of the scale of product applications. However, LED screen companies are still able to maintain the development situation of "profit growth" exceeding "scale growth" by developing products with a finer pitch, expanding market scale, and extending the service industry chain.

    2. The gap between the Chinese and foreign markets has widened

    Second, the gap between the Chinese and foreign markets and enterprises has further widened. If before 2012, the small-pitch LED domestic industry was still following the development of the international market, then the whole situation has been completely reversed now. At present, the domestic market has mainly promoted the popularization of P1.2-level products. Such products are also the "threshold resolution" that can maintain the best results in emerging fields such as VR. In contrast, traditional LED display giants such as Europe, America and Japan are still looking for a way out in the market of products above P1.5.

    3. Expansion of upstream proportion

    Third, the local proportion of the upstream industry chain has expanded. Including the localization of 1010 lamp beads and the localization of some key equipment, it has become the main key force to promote the cost reduction, scale expansion, and profit increase of small-pitch LED products. Small-pitch LEDs have higher requirements for LED lamp beads, substrate materials, and packaging technology. This has created a space for differentiated growth under the background of the overall market downturn in the LED manufacturing industry, and has received extensive attention from the domestic LED chip industry chain.