According to market research by Xinhua Finance Tokyo, Chinese LED display application products account for over 85% of the global market share. In recent years, with the increasing competition in the domestic market, LED display screen leading enterprises such as WorldCom Bell, Liade, and Lianjian Optoelectronics have turned their attention to overseas markets, seeking broader development space. Japan is one of the important target markets for these enterprises

Chinese LED companies are rolling into the Japanese market

From the huge viewing screens at the home baseball field of the well-known Hokkaido Japanese Ham Fighters team to the popular 3D animations on the exterior walls of buildings located at the famous "crossroads" of Shibuya and Shinjuku in Tokyo, more and more Japanese companies are adopting LED displays from China.

According to industry insiders, there are currently about 20-30 Chinese LED display screen companies operating in the Japanese market, and many small and medium-sized LED screen manufacturers are selling products to Japan through agents. Chinese companies are rapidly increasing their market share in the Japanese market.

Analyzing the financial reports of leading enterprises also reveals that the proportion of overseas markets, including the Japanese market, in the overall business of the enterprise is increasingly expanding.

According to research, most LED companies currently adopt a channel model for overseas sales, signing contracts with overseas distributors to build a large agency sales network. Some top companies are also gradually cultivating their online and offline overseas direct sales capabilities.

Industry trends and the path of differentiated competition

In the fierce market competition, enterprises can only continuously upgrade their technology, upgrade their products, accumulate energy in innovative fields, and enhance their differentiated competitiveness. COB integrated packaging technology, Mini/Micro LED display technology, LED virtual shooting and other directions are expected to become new additions to the development of the LED market.

One is that COB products are becoming mainstream, and MIP technology is becoming increasingly mature. Almost all top companies have made COB (Chip on Board) technology their main investment direction in research and development. COB technology can integrate multiple LED chips more compactly together, so using this technology can design and manufacture displays with smaller pixel spacing, higher resolution, and suitable for close range viewing, such as indoor video walls, advertising displays, etc. At the InterBEE 2023 in Japan held in November last year and the recently concluded ISE 2024 (European Professional Audiovisual and System Integration Exhibition), Chinese exhibitors such as Shitong Bell showcased new indoor and outdoor LED products using COB micro pitch technology.

Compared to COB technology, MIP packaging technology (single pixel packaging or integrated LED packaging), which is more suitable for complex designs and small-sized displays, is also becoming more mature. Shitong Bell, Liade, Zhouming, and others have all chosen a technology path that combines COB and MIP packaging methods.

The second is the acceleration of the commercialization of Mini/Micro LEDs from "huge" to "huge small". Outdoor large advertising screens are our general understanding of the application of LED displays. However, with technological progress, Mini/Micro LEDs are expected to be applied in many consumer electronic display fields such as televisions, watches, AR glasses, etc., due to their advantages of high contrast, wide color gamut, high brightness, low power consumption, long lifespan, and short response time, bringing new output value growth. According to GGII's estimate, the global Micro LED market is expected to exceed $10 billion by 2027.

The third is that naked eye 3D screens have become a beautiful scenery in the commercial display field. In recent years, many domestic and foreign naked eye 3D screens have become popular check-in points and tourist landmarks. LED screen manufacturers have presented numerous works and cases such as Chengdu Taikoo Li with their content creation ability and naked eye 3D arc display algorithm, and naked eye 3D has become one of their representative businesses.

Fourthly, XR virtual studios bring about a transformation in the way film and television production is conducted. Can you imagine that many scenes in the popular Korean drama "Dark Glory" are not filmed in real time, but are presented on the screen using XR virtual studios. Many times, actors are only in front of the scenes displayed on the screen rather than in real time. The use of XR virtual studios has the advantages of reducing shooting costs, shortening production cycles, and improving film quality, accelerating the growth of market demand. XR virtual studio is not only used for movie and advertising shooting, but also for online corporate events, online press conferences, and so on. Companies such as Lianjian Optoelectronics and Aotuo Electronics have already laid out and explored in this field.

TrendForce predicts that the global market size for XR virtual shooting displays will reach 560 million, 760 million, and 980 million US dollars respectively from 2023 to 2025, with growth rates of 40%, 35%, and 30%, which will drive an increase in demand for LED displays.

The fifth is that LED movie screens may overturn traditional big screens in the future. Compared with the traditional projection+screen projection method, LED movie screens have huge advantages in display brightness, contrast, color gamut, ultra-high definition and other technical indicators, which can achieve more three-dimensional, more realistic, more detailed, and stronger on-site image performance. After overcoming difficulties such as technology, stability, replacement costs, and industry interest interference, LED movie screens are expected to ignite a visual revolution in cinemas and become a new engine of industry growth.

Where are the more opportunities in the Japanese market?

Japan, as the world's third-largest economy, has a highly developed commercial sector, and there is still a lot of room for improvement in the penetration rate of LED displays in various application scenarios. Chinese LED display screen companies generally regard the Japanese market as one of the core overseas markets based on this point.

One is the digital upgrade of advertising, corporate commerce, and other scenarios. Ye Dunchao, Deputy General Manager of Lianjian Optoelectronics Overseas Sales Center, said that there are many advertising screens in Japan, but it is estimated that 80% -90% are still traditional signs rather than digital advertising. There is huge potential for future upgrade and replacement demand. At the same time, Japan is also the headquarters of many large enterprises, and there is also a huge market space for enterprise exhibition halls and conference applications.

The second is that the digital transformation (DX) and green transformation (GX) led by the Japanese government will bring more application scenarios. Compared to its level of economic development, Japan's e-government and digital development of enterprises are relatively backward, and traditional methods such as paper media and telephone and fax are still used in many fields, exacerbating labor shortages and limiting the improvement of labor productivity. Therefore, the Japanese government supports the promotion of digital and green transformation, and LED displays and their AIoT applications are indispensable in many scenarios such as urban management, Industry 4.0, energy conservation and environmental protection in the future.

Thirdly, Japan's cultural and entertainment industry is developed, with numerous LED technology application scenarios. Japan has numerous performance venues, such as theaters and sports stadiums, providing a huge demand for rental and fixed installation of stage LED screens. Meanwhile, Japan has numerous art galleries, museums, theme parks, and leisure centers, providing growth points for LED amusement systems and digital entertainment experiences. TeamLab, which uses advanced technologies such as projection, sound and light, and digital interaction to create digital media art, is a Japanese company that extensively utilizes LED lighting and display technology in its works. In addition, the film and television production industry in Japan is well-developed, and there is a high demand for solutions such as LED displays and XR virtual shooting in related fields. Alto Electronics is eyeing this field and actively expanding into the Japanese XR market in collaboration with overseas film and television equipment manufacturers.

Fourthly, there are numerous sports events and exhibitions in Japan, providing numerous opportunities for LED display screen enterprises. The number of major sports events and international exhibitions held in Japan each year ranks among the top in the world. Osaka will also host the World Expo in 2025, which is believed to drive the demand for LED displays to a certain extent.