Challenges and Opportunities for the LED Display Industry Amid Price Hikes and Tariff Battles

Posted by

Tingting Zhao

07/17/2025

On 07/17/2025

Special Report by: Cheng Tao, Wang Xinru
Contributing Journalists: Ouyang Jing, Wang Xiaolei, Li Xiaoyan

Since the beginning of 2025, numerous midstream and downstream enterprises in the LED display industry have issued price adjustment notices. Core products such as display modules and packaging components have seen price increases ranging from 5% to 15%. Additionally, since April, tariff policy has emerged as a major factor influencing the development of the LED display sector.

On April 2, 2025, former President Donald Trump signed two executive orders on “reciprocal tariffs,” announcing a minimum 10% baseline tariff on all trading partners, with higher rates applied to certain countries, including China. This policy took effect on April 9. However, just two days later, on April 11, the United States announced exemptions for certain products, including display modules, LED products, semiconductor devices, and smartphones originating from China, effectively lifting the previously imposed 125% reciprocal tariff.

Under the dual pressure of rising prices and an ongoing tariff war, the LED display industry is undergoing an unprecedented transformation. This wave of price fluctuations not only reflects the stress of global supply chain restructuring but also forces companies to rethink their survival and growth strategies from a strategic perspective.

Price Adjustment Overview for Select LED Display Enterprises in 2025

Gaoke Huaxing
On February 28th, Gaoke Huaxing issued a “Contact Letter” announcing that, after careful consideration, the company has decided to increase the price of one of its star products in the indoor display sector, the Deep Blue 2020 Copper, by 15%, effective from March 1, 2025. The specific price will be based on the company’s latest price list.

MLS Co., Ltd. (Mulinsen)
On February 28, Ji’an Mulinsen Display Co., Ltd., a subsidiary of MLS, released a “Contact Letter” to its clients and partners. The letter emphasized that due to rising raw material costs, particularly PCB prices, the company had decided to adjust its module pricing, with the changes taking effect on March 1.
The modules affected include 320×160 P2.5 (single/double row, 64-scan/32-scan), P2.0 (single/double row), P1.8 (single/double row), P1.5, and P1.2. Price increases generally range between ¥0.5–1 per unit.

HSC LED (Haijia Group)
On March 1, Fujian Haijia Group issued a “Price Adjustment Notice”, citing rising raw material (PCB) costs due to changing market conditions, which have significantly increased the company’s material expenses. In order to maintain product quality and service standards, Haijia decided to raise the prices of its indoor and outdoor standard LED module series. The increase ranges from ¥0.5 to ¥1 per unit and officially took effect on March 1.

Ruisheng Optoelectronics
On March 14, Ruisheng Optoelectronics released a price adjustment notice stating that international prices for copper and silver have remained high and continue to rise, significantly increasing production costs. To ensure product quality and continued service improvement, the company announced a 10% price increase for its copper bracket products, effective March 15.

Skyworth Commercial (SKYWORTH)
On March 12th, Skyworth Commercial issued an “LED Module Price Adjustment Notice,” stating that due to the continuous rise in raw material prices, and in order to ensure the stable supply of high-quality products to customers, the company has decided to adjust the prices of various LED module products starting on March 30, 2025. The specific adjustments are as follows:

MCN250 high-refresh 64S module, 320*160, P2.5, with a price increase of 1 yuan per panel.
MCN200, 320*160, P2, with a price increase of 1 yuan per panel.
MCN186 module, 320*160, P1.86, with a price increase of 2 yuan per panel.
MCN153 module, 320*160, P1.53, with a price increase of 2 yuan per panel.
Price adjustments for other LED module models will be based on future upstream market conditions.

Heying Circuit
On March 11th, Jiangxi Heying Circuit Co., Ltd. issued a product price increase notice, announcing that prices for all products in their series will be adjusted, with the P10 series products being uniformly increased by 5%. This price adjustment plan will be officially implemented starting March 11, 2025. Orders placed before March 11 will be shipped at the original quoted price, while orders placed after March 11 will be subject to the adjusted prices.
According to information, Jiangxi Heying Circuit Co., Ltd. was established in 2013 and focuses on manufacturing electronic equipment, with a primary product line including LED display circuit boards. In June 2023, the company initiated a technological upgrade project with an annual production capacity of 900,000 square meters of circuit boards, investing 130 million yuan to introduce fully automated machines and V-CUT machines to enhance production efficiency.

Damei Intelligent Optoelectronics
On March 13, Shenzhen Damei Intelligent Optoelectronics Co., Ltd. issued a price increase notice. Due to a surge in the prices of various raw materials, which has significantly raised production costs, the company announced a full-line price increase for all its SMD/dip single and dual-color products. Final pricing will be based on the company’s latest quotation.

Causes of the Price Increase Wave: A Dual Logic of Cost Drivers and Profit Recovery

Rising Raw Material Costs
In March 2025, the main copper price in Shanghai exceeded 80,000 RMB per ton, an increase of over 8% from the beginning of the year, directly driving up the cost of core components such as PCB boards (which account for 15%-20% of production costs). Fluctuations in silver prices and global supply chain pressures (such as inventory build-up due to U.S. tariff policies) further intensified premiums, with copper premiums surpassing $1,000 per ton. These costs have indirectly passed down the LED industry chain, with mid-stream packaging and downstream display module companies facing double cost pressures.
Urgent Need for Profit Recovery in the Industry
According to public data, over the past four years, the average price of LED display products has decreased by 30%-40%, and the industry’s gross profit margin has dropped from 30% to below 15%. Despite a compound annual growth rate (CAGR) of 8% in market demand, the price war has severely compressed profit margins for companies. In this wave of price increases, companies are attempting to recover profits through price hikes of 5%-15%, particularly in high-end fields like Mini/Micro LED, where technological iterations (such as MIP and COB packaging technologies) provide market acceptance for price premiums.
Resurgence of Demand and Inventory Cycle Resonance
Against the backdrop of global economic recovery in 2024, terminal manufacturers’ inventories are gradually returning to normal levels. Since 2025, orders for LED display screen companies have been increasing at the expected rate, driving stocking demands along the industry chain. Meanwhile, the growth in demand for stage rentals, LED filming, and AR/VR displays has pushed leading companies to adjust their product structures and increase the proportion of high-value-added products.

Impact of the Tariff War: Global Supply Chain Fragmentation and Reconstruction

Since February to March 2025, the U.S. has continually announced additional tariffs on imported Chinese goods, further escalating tariffs on products from China, with the U.S. issuing an “equivalent tariff” executive order in April, which severely disrupts the global free market economy. These new tariffs on Chinese imports include a 34% additional “equivalent tariff,” with the potential to increase to 104%. The U.S.’s highly destructive unilateral policies and trade protectionism, along with frequently changing tariff policies, have had a profound impact on the global trade landscape.
The tariffs on the LED display industry have had a complex domino effect, affecting costs, prices, market competitiveness, and supply chains at multiple levels.

Cost Surge: Profit Challenges Under Tariff Pressure
The direct impact of the tariffs is a significant increase in costs. The U.S. has imposed tariffs as high as 79% on Chinese LED display products, combined with the previously accumulated 20% tariff, resulting in a total tariff cost of an astonishing 54%-79%. This means that an LED display originally with a price advantage in the U.S. market now faces a huge change in cost structure due to the added tariffs. This cost increase not only squeezes profit margins but also forces companies to reassess their pricing strategies and market layouts. To maintain profits, companies have to consider raising product prices, but this could further undermine their competitiveness in the U.S. market.
Price Increase: Structural Changes in Market Demand
The tariffs have driven up the prices of LED displays in the U.S. market, directly affecting consumers’ purchasing decisions. On one hand, price-sensitive consumers have started to turn to more affordable alternatives or purchase similar products from other countries, causing a gradual shrinkage of the consumer base for Chinese LED displays in the U.S. On the other hand, although some high-end customers may still be willing to pay a premium for high-quality Chinese products, overall market demand has been suppressed. This structural change in market demand poses challenges for companies’ sales strategies in the U.S. market. Companies will need to more precisely target their customer base and develop appropriate marketing strategies to cope with changes in market demand.
Weakened Competitiveness: Potential Market Share Loss
The tariffs have weakened the price advantage of LED displays in the U.S. market, causing a decline in the competitiveness of Chinese companies. As a significant market for LED displays, the loss of market share in the U.S. will have a major impact on Chinese companies. On one hand, local U.S. LED display companies may gain a larger market share as a result; on the other hand, competitors from other countries may take the opportunity to expand their market share in the U.S. To address this challenge of weakened competitiveness, companies will need to enhance product value through technological innovation to differentiate their products from competitors. Additionally, companies must strengthen brand building to increase their recognition and reputation in international markets.
Market Demand Changes: Stability in High-End Markets and Growth in Emerging Markets
The impact of equivalent tariffs on LED display market demand has shown clear signs of differentiation, with high-end markets remaining relatively stable while emerging markets are seeing growth opportunities. This pattern is the result of multiple intertwined factors.
The demand for high-end LED displays in the U.S. market has shown significant resilience. Although tariffs have raised the end-user prices, high-end commercial customers are less sensitive to price and focus more on product performance and brand recognition. For example, venues for sports events and high-end retail stores have stringent display requirements, and Chinese companies like Leyard and Unilumin can still maintain market share due to their technological accumulation and brand reputation. According to public data, the U.S. market is dominated by mid-to-high-end products, with high transaction amounts and stable gross profit margins. This demand structure has weakened the direct impact of tariffs on the high-end market.
Technological advancements have extended the application of LED displays to more scenarios. Emerging fields like smart homes, virtual reality, and in-vehicle displays have seen growth in demand, partially offsetting fluctuations in the traditional advertising display market. Meanwhile, emerging markets have generated new demand through their digital transformation, such as urban construction projects in Middle Eastern and Southeast Asian countries, which have led to an explosion of applications in traffic signs, public information displays, and “night economy” sectors.
Supply Chain Adjustments: Reevaluating Global Layouts
To avoid tariffs, LED display companies may consider setting up production bases in the U.S. or other countries. However, this adjustment is not without challenges. Companies need to invest significant time and money in overseas expansion. Furthermore, setting up factories overseas faces various uncertainties, such as local labor costs, policies, and regulations.
Taking Mexico as an example, although it has advantages in geographic location and free trade agreements, companies still face higher operational costs and policy risks when setting up factories there. Additionally, supply chain adjustments could lead to increased operational costs, such as rising logistics costs and the complexity of supply chain management.

Strategies for the LED Display Industry to Respond to Challenges

In the face of U.S. tariffs on the LED display industry, it is essential for the sector to implement a series of strategies to address rising costs, changes in market competitiveness, and adjustments to the supply chain.

Technological Innovation and Product Upgrades: Adding Value and Enhancing Competitiveness
With tariffs driving up costs, companies must focus on technological innovation to increase the added value of their products, helping to offset the pressure from tariffs. LED display companies can increase R&D investments to develop high-end products with higher resolution, lower energy consumption, and longer lifespans, meeting the needs of high-end customers. By developing products with high refresh rates and excellent color reproduction, they can attract customers in the premium market, effectively mitigating the impact of tariffs.
Additionally, companies can explore new technological fields, such as Mini/MicroLED, to reduce dependence on traditional supply chains and enhance product competitiveness. Leading companies like Leyard and Unilumin Technology have already made progress in this field, consolidating their market position through technological innovation.
Supply Chain Optimization and Management: Lowering Costs and Increasing Efficiency
Optimizing supply chain management is a crucial strategy for dealing with tariffs. Companies should actively adjust their supply chains to lower production costs and improve efficiency, such as strengthening communication and cooperation with suppliers to ensure stability and reliability in the supply chain. Additionally, they can localize production or engage in transshipment trade to mitigate tariff impacts.
Mexico, with its geographical advantages and free trade agreements, has become a popular region for transshipment trade. Companies can set up production bases in Mexico to leverage local advantages and reduce tariff costs. However, it is essential to monitor any changes in U.S. tariff policies regarding third-party countries to mitigate potential risks.
Market Diversification Strategy: Reducing Dependence and Spreading Risks
Over-reliance on a single market can make companies vulnerable to policy changes. Therefore, companies should actively explore emerging markets such as Europe, Southeast Asia, and the Middle East to reduce dependence on the U.S. market. For example, by leveraging the Belt and Road Initiative and collaborating with businesses in countries along the route, companies can expand their products to the Middle East and Southeast Asian markets, helping to offset the loss of market share in the U.S.
Additionally, companies can enhance brand recognition and reputation in international markets by participating in international exhibitions and hosting product launch events.
Government Support and the Role of Industry Associations: Providing Assistance and Promoting Development
Government policy support and the coordination of industry associations are critical to the development of the sector. Governments can help companies reduce operating costs and market risks through measures such as export tax rebates and financing support. For example, policies issued by ministries such as the Ministry of Finance to support the development of the new display industry exempt import tariffs on key raw materials and components, assisting companies in lowering costs.
Industry associations should play a coordinating role by organizing businesses to jointly address international trade disputes and challenges. For example, they can provide guidance and support to businesses through industry research, policy interpretation, and other activities, fostering healthy industry development.
Industry Collaboration and Synergy: Sharing Resources and Collaborative Innovation
In the face of common challenges, companies need to strengthen collaboration with upstream and downstream enterprises in the industry chain to jointly address the challenges brought by market demand reduction and tariff policies. By sharing resources and innovating collaboratively, the competitiveness of the entire industry chain can be enhanced. For example, companies can jointly develop key technologies, share market information and resources, and form synergies that increase the overall industry’s ability to withstand risks.
Monitoring Policy Changes and Proactively Responding: Flexibly Adjusting to Mitigate Risks
Companies must closely monitor changes in U.S. tariff policies and adjust their business strategies accordingly. At the same time, they should be vigilant about potential trade protection measures such as patent wars and strengthen intellectual property protection to enhance international competitiveness. For example, companies can establish a “tariff-technology” early warning mechanism to make early adjustments for areas that may enter the tariff exemption list, minimizing the impact of tariffs. Furthermore, companies can explore legal avenues to protect their interests, such as applying for tariff exemptions or participating in international trade negotiations to actively respond to tariff-related challenges.

The State and Future of the LED Display Industry Amid Trade Wars and Price Surges

Under the dual pressure of the U.S.-China trade war and a global wave of price hikes in the LED display industry, China’s LED sector has demonstrated strong resilience and structural advantages. These advantages stem from a massive domestic demand base, a complete industrial chain, and flexible foreign trade strategies. Together, they create a virtuous cycle driven by demand, fueled by technological advancement, and supported by global market diversification.

Domestic Demand Drives Upgrades and Growth

From a market perspective, China’s massive internal demand acts as a stabilizing force. Despite international trade tensions, the country’s push for new urbanization and digital transformation has generated significant incremental demand. Applications in smart cities, commercial complexes, and sports venues have driven annual growth rates of over 15% in LED display demand. Notably, the localization rate of high-end products like small-pitch and Mini LED displays has surpassed 80%. This evolving demand structure compels the industry to upgrade technologically, forming a positive feedback loop of “application expansion → technological iteration → cost optimization.”

A Fully Integrated Supply Chain Boosts Efficiency

At the supply chain level, China’s LED industry has developed a complete ecosystem covering raw materials, chip manufacturing, packaging, module assembly, and final product integration. In the upstream chip segment, leading manufacturers have leveraged economies of scale to reduce costs to globally competitive levels. Midstream, automation in packaging has led to high yield rates, while downstream manufacturing clusters in the Pearl River and Yangtze River Deltas enable rapid delivery. This vertical integration not only cushions the impact of raw material price surges but also fosters differentiated competitive advantages.

Data shows that Chinese LED displays now account for over 80% of the global market share. From basic component assembly two decades ago to today’s high-tech manufacturing, China’s LED industry has undergone a remarkable transformation. This immense market scale is also driving the industry toward further segmentation into high-end products and new technologies. With robust domestic innovation, China is rapidly progressing through smart, industrial, and global upgrades.

The Short-Term Appeal and Long-Term Risks of Transshipment Trade

Transshipment trade involves routing goods through a third country to avoid tariffs imposed on the country of origin. In the short term, this strategy has helped Chinese LED companies bypass high U.S. tariffs. Countries like Vietnam and Mexico, which have lower import duties, have become transshipment hubs, with some Chinese companies relocating production to these regions before re-exporting to the U.S.

However, this approach carries considerable risk. If transshipped goods are mislabeled or lack substantial processing in the third country, they may violate U.S. trade laws, leading to hefty fines or even criminal charges. In 2025, while the U.S. temporarily deferred tariffs on transshipment countries like Vietnam and Cambodia for 90 days, it simultaneously imposed high duties on these nations to deter circumvention. Additionally, policy changes driven by international pressure could abruptly end transshipment benefits—Mexico, for instance, is now under increased scrutiny due to rising transshipment activity.

Moreover, transshipment increases logistical complexity and costs. With more intermediaries involved, any disruption in the supply chain could lead to operational paralysis. Recognizing this, Chinese LED firms have not relied solely on transshipment as a long-term solution. Instead, they have adopted a multifaceted strategy to weather the storm.

Strategic Responses to Tariffs and Price Pressures

According to customs data, China’s LED display exports reached approximately ¥10.48 billion in 2024, marking a 2.22% year-over-year increase. This growth—achieved despite a complex and uncertain global economic climate—is noteworthy. Emerging markets played a vital role, with Southeast Asia, the Middle East, and Africa showing significant growth in LED display demand.

China remains the world’s largest LED market, fueled by initiatives like smart cities and new infrastructure projects. Some companies have established overseas production bases—in Vietnam or North America—adopting a “localized manufacturing” strategy to sidestep tariffs.

In addition, many LED manufacturers are strengthening their competitiveness through technological innovation. For example, Unilumin’s Micro LED products are now used in Hollywood studios, leveraging their proprietary technology to break into premium global markets. By offering customized solutions for high-end applications like virtual filming and cinema displays, these companies increase their bargaining power.

While transshipment may offer short-term relief, Chinese LED firms are instead focusing on long-term resilience through market diversification, supply chain optimization, technological upgrades, and deeper penetration of the domestic market. Ultimately, only by continuously improving product innovation and added value can companies maintain a stable foothold in the evolving global trade landscape.

Innovation and Cost Control Amid Price Surges

To address price inflation, LED display companies must reduce production costs and enhance product value through innovation and supply chain improvements. This includes adopting more efficient packaging technologies to improve both productivity and product quality. Additionally, companies should strengthen collaboration with customers by offering long-term contracts and tailored services to mitigate the impact of rising prices and foster stable partnerships.

As one industry expert noted: “Short-term price fluctuations do not change the LED industry’s long-term trend of constant innovation, lower prices, and expanding applications.” While companies naturally seek a balance between cost, profit, and growth, the long-standing pattern of “cost reduction → demand expansion → innovation” remains unchanged.

Over a longer horizon—10, 20, or 30 years—the LED industry exhibits a clear trend of declining costs and increasing technological sophistication. The future profitability, operational strength, and market scale of companies will depend heavily on continuous innovation. This includes cost-driven innovations that reduce manufacturing expenses—an important dimension of technical progress.

Experts believe the industry is now shifting from “extensive expansion” to “refined innovation.” Overcoming raw material price hikes through technological iteration and breaking profit bottlenecks through creative market applications are key to sustainable development.

Exporting Standards: The Next Frontier

Technical standardization is becoming a vital tool in breaking down non-tariff trade barriers. When reciprocal tariffs drive up trade costs, products certified to meet international standards—like CE in the EU or UL in the U.S.—are often eligible for tariff reductions or exemptions. If China can develop internationally recognized standards in areas like LED energy efficiency or intelligent control protocols, it will lower compliance costs and position “Chinese standards” as global benchmarks.

Establishing such standard-setting authority requires a coordinated “technology–standard–industry” ecosystem. This means moving beyond isolated innovations and building comprehensive systems covering materials, processes, and testing. For example, Huawei has led over 1,800 global 5G standards based on its broad technological breakthroughs. The LED industry must similarly create robust standards for packaging processes, optical quality evaluation, and smart control protocols. Participation in organizations like ISO and IEC will allow China to integrate its technology into international frameworks and shift from a passive rule-follower to a rule-maker.

Ultimately, standards competition is about controlling the industry ecosystem. Under the twin pressures of price surges and tariffs, the LED sector must transcend the old “tech-for-market” model and convert technological superiority into regulatory leverage. This shift demands a robust patent foundation and the establishment of cross-border standard alliances—particularly in new fields like smart lighting and optical communication. When Chinese LED companies transition from adhering to global standards to writing them, they can move from being a low-cost player to a value leader on the world stage.

Conclusion

The trade war and rising costs may appear as obstacles, but they are actually catalysts for industry restructuring. China’s LED display industry, with its deep-rooted demand, operational efficiency, generational technological advantages, and niche positioning, is turning “scale dividends” into “structural dividends.”

As the global display industry enters a more competitive and complex phase, Chinese companies have managed to achieve in a decade what took developed countries 30 years. This combination of latecomer advantage and ecosystem integration could mark the beginning of a new era in global high-end manufacturing led by China.

Furthermore, with the convergence of emerging technologies like 5G, IoT, and AI, LED displays will evolve beyond traditional information presentation toward intelligent, networked, and interactive applications. For example, smart LED displays will automatically adjust brightness, color, and content based on the environment and user preferences, delivering personalized experiences. Meanwhile, Mini and Micro LED technologies will continue to mature, driving the industry toward ultra-high-definition, ultra-thin, and flexible displays.

LED companies that can seize the opportunities presented by technological upgrades, market realignment, and supply chain optimization will transition from reactive adaptation to proactive transformation. As industry insiders put it: “Whoever wins this battle will secure a larger market share.” The future belongs to companies that can dominate both their home market and global landscape—those with technological moats and resilient supply chains.

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