The analyst firm DSCC, which focuses on the supply chain for the display industry, is suggesting the trade tariffs US President Trump will be imposing Sept. 1 on China could raise end-user costs by 10% across the range of electronics products coming out of that country.
But it also suggests over-supply in the industry might actually push prices down in the short-term.
“The next wave will hit nearly all the products not included in prior (tariff) rounds, including consumer products like toys, shoes, clothing, and most consumer electronics,” says DSCC in a market update. “Nearly every application for displays – smartphones, monitors, notebooks, tablets, TVs, and wearables will be hit with the 10% tariff. “
“For the most part, the costs of the tariff will be passed along to consumers in higher prices, which will generally reduce the demand for these products. That means a net loss for the display industry, as the US represents about 25% of global demand. An industry already suffering from overcapacity will get worse.”
“I expect that in many cases it will be difficult to see a price increase. We know that some companies have been shipping ahead of demand in recent months, to get imports into the US before the tariff takes effect. This is likely to accelerate this month for products (like smartphones) that can be air-shipped, but by now it is too late to change anything that requires surface shipping. Most of the major TV brands, even including Chinese brands Hisense and TCL, have production in Mexico, so are likely to shift some production there. With the steep reduction in LCD panel prices over the last 18 months, I still expect to see all-time low prices for Black Friday this year despite the tariff.“
The DSCC analyst suggests. in closing: “Hold on tight, though. I still believe “it will get worse before it gets better.”
The three largest display players in digital signage are all based outside of China, but like every electronics company, they source components from China. So I’d expect the price impact will vary.