Coronavirus decimates public display production in China

The coronavirus has caused manufacturing rates of digital-signage products to plunge in the first quarter, contributing to production cuts of nearly 30% for public-display products, according to Omdia.

Unit production of televisions used for signage applications is expected to decline by 10.9% in the first quarter of 2020 compared to the same period in 2019. Production of interactive flat panels (IFPs)/touch displays will decline by 20.9% during the same period, while signage and information-display products will undergo a 28.5% decrease. The videowall segment is expected to fare the worst, with manufacturing of these products expected to drop by a full 46.5%.

“Digital-signage production lines are highly concentrated in Guangdong and Zhejiang provinces, where the coronavirus is having the biggest impact,” said Tay Kim, research and analysis associate director at Omdia. “Many factories opened on Feb. 3, but the majority of employees still have not resumed work. As a result, China’s digital signage market is expected to suffer an overall labor shortage of about 30 percent through the month of February, causing production levels to plummet throughout the first quarter.”

Signs of the times

Public displays are flat-panel displays intended to be used in out-of-home (OOH), public environments, and by multiple individuals simultaneously. These displays convey information, advertising, or other forms of messaging with full color and motion capabilities.

The global market for public displays, signage TVs and consumer TVs is estimated total $14.3 billion in 2019, according to data from the Omdia Public Display Market Tracker – Country Level report.

Displays in distress

The production cuts for digital signage products are partly the result of declining manufacturing rates for LED and LCD displays used in such solutions. These displays are predominately manufactured in China and producers are struggling with many of the same coronavirus-related labor issues facing the digital-signage suppliers themselves.

Unit production of LED video displays in China in the first quarter is expected to fall by 36.8 percent on a year-over-year basis.

There are more than 20 LED and LCD suppliers operating in affected regions of China, including TPV, Hikvision, Dahua, CVTE, Hitevision, Unilumin, and Absen.

Signage market challenges

In addition to labor shortages, digital signage suppliers are encountering other coronavirus-related problems, including component shortages.

“Due to the slowdown in customs clearance, LCD panel makers are unable to secure sufficient supplies of components, including package cartons, printed circuit boards, integrated circuits and LCD modules,” Kim said. “The customs issues are presenting major logistical challenges for digital signage companies.”

As previously mentioned, products including signage and information display solutions, IFPs and videowalls are experiencing particularly sharp production slowdowns in the first quarter. Such products require human labor for installation and service—an asset that’s in critically short supply right now due to Coronavirus.

-- Tay Kim, research and analysis associate director at Omdia, UK.