What specific impacts will LED display companies face on their overseas expansion?
1.Tariff increase, profit margin compression
This year, Trump has publicly stated on multiple occasions that if he is elected as the President of the United States, he will immediately impose higher tariffs on Chinese goods.
According to calculations by CITIC Securities, once Trump's plan to impose a 60% tariff on Chinese goods is implemented, China's exports to the United States may decrease by 16%, dragging down China's overall export growth rate by 2.3 percentage points, or 80 billion US dollars. High tariffs will directly lead to extreme compression of profit margins for enterprise products
The US market has always been a gold mine for Chinese LED companies. According to data from the General Administration of Customs, the export value of LED display screens in China in 2023 is 1025431830 yuan. From the perspective of export destinations, the top 10 countries or regions for China's LED display exports in 2023 are the United States, Hong Kong, Russia, Singapore, Malaysia, South Korea, India, Brazil, Japan, and Vietnam. In the North American market, the quality requirements for LED display products are extremely strict. Faced with high tariffs, if Chinese LED display products lose their price competitive advantage, they will be suppressed by local North American companies.
2.Market uncertainty
In 2023, Trump proposed on his campaign website the future development of the Strategic National Manufacturing Initiative (SNMI), advocating for the return of manufacturing to the United States. Due to its extensive promotion of the return of manufacturing industry, it will further accelerate the process of "anti globalization". The return of manufacturing to the United States is not a single enterprise behavior, and it will lead to a large number of suppliers turning to countries such as Vietnam and India. At the same time, the United States has long been at the high end of the industrial chain, and its core manufacturing technologies will be strictly protected, which is not conducive to the stable development of China's manufacturing industry and accelerates direct competition between China and the United States in the international arena.
Response strategies for China's LED display industry
China has achieved remarkable achievements in the field of LED, not only occupying the majority of the global market in product sales, but also demonstrating strong capabilities in technology research and development, especially in areas such as silicon-based micro displays, Micro LEDs, and printed displays. However, with the intensification of international competition, the United States has begun to impose targeted restrictions on Chinese companies.
1.Strengthening independent research and innovation capabilities is crucial.
By increasing investment in research and development, we can accelerate the penetration of emerging application fields, especially in the field of new generation MLED technology, in order to enhance the technological content and market competitiveness of our products
2.Chinese LED companies need to actively explore new markets and reduce their dependence on the US market
The the Belt and Road, African cooperation, South American development, and BRICS cooperation are all market directions that Chinese LED display enterprises can explore. At the same time, actively entering the international competitive market and enhancing international influence through cross-border mergers and acquisitions. By improving product quality and performance, we aim to enhance the international competitiveness of our products.
After Trump's victory, Chinese manufacturing companies will face new challenges and opportunities. However, despite facing many difficulties, China's LED display industry still has broad development prospects. The Chinese government has always attached great importance to the development of the LED industry and introduced a series of policy measures to promote the research and application of LED technology. Chinese LED display companies can only stand undefeated in fierce international competition by continuously strengthening independent innovation, improving product quality and technological level.