By Marco Boer
While wide format graphics output is profitable, there are related challenges, including market maturity, consolidation, and higher productivity equipment. First, market maturity—wide format is a replacement market. Secondly, consolidation and external competition drive the market to become a more professional managed business that depends on greater investment in automation and software. Finally, a shift to higher productivity equipment tends to have lower consumable costs.
This last point works in favor of more productive—i.e. faster drying—ink technologies, such as UV-curable and latex/eco-solvent ink chemistries. IT Strategies projects UV-curable wide format inkjet printers will be the fastest growing segment through 2028, while eco-solvent/latex remains the largest category in volume and revenue through the sheer scale of its install base.
Overall, IT Strategies projects wide format graphics inkjet revenues will grow five percent annually between 2020 and 2028 However, at that growth rate vendor revenues won’t return to 2019 revenues until 2028.
The rest of the report breaks down the market by ink technology—aqueous, eco-solvent/latex, UV-curable, and soft signage dye-sublimation (dye-sub).
Aqueous Wide Format Inkjet
Aqueous wide format graphic printers—specifically those in the six- to 12-color range—struggled in 2022. Aqueous unit sales were down 20 percent from 2021/2022. The decline is a bit misleading as the high number in 2021 was a reflection of pent-up demand coming out of the COVID-19 pandemic.
A long-term challenge for aqueous wide format graphics printers is the continuing shift to CAD units for graphics usage, a market four to five times larger than aqueous wide format graphics. Four-color wide format CAD inkjet printers are capable of creating even photographic quality when using photobase inkjet coated papers—relegating the six- to 12-color wide format graphics printers for all but the highest output quality applications.
Demand for 24-inch printers spiked in 2021 in part because more graphics professionals were working from home. For as little as $1,000 they could buy a wide format graphics printer. The 36-inch and over wide format graphics printers were susceptible to substitution by 36-inch CAD printers.
The installed base is seeing a lot of retirements, mainly due to inactive printers during COVID-19 failing beyond economically viable repair. Effectively IT Strategies is projecting flat growth for the installed base of aqueous wide format printers.
One additional source of competition for aqueous wide format is from specialties like dye-sub and canvas prints on latex. Eco-solvent and latex are expected to continue to steal share from aqueous as they feature lower cost inks.
Hardware and ink revenues are depicted as falling over 30 percent during COVID-19. Combine this with strong competition from aqueous CAD and eco-solvent/latex printers and IT Strategies expects vendor revenues for hardware and ink to remain flat through 2028, never recovering to 2019 levels. While no one likes flat revenues, it is an indication of market maturity. It also means there is less investment required in innovation.
Designed for outdoor and indoor use, eco-solvent and latex segments are expected to continue to grow as applications expand beyond signage into décor. 2022 was a transition year in new product introductions effecting unit sales, enabling eco-solvent to pick up share with its much broader offerings.
Like the aqueous wide format segment, there is a lot of transition. There is a high rate of retirements of older machines and new replacement sales have kept the installed base flat, with uptick expected as these products start to displace more screen/offset output.
Low-end latex printers sell for under $50,000; high-end latex printers sell for over $100,000. The high-end latex printers are used for décor printing, such as wallcoverings and furnishings. They account for a small part of the installed base, but because of their productivity they capture a far greater proportional share of revenues than eco-solvent or low-end latex printers. Productivity is key—high-end latex accounts for two percent of the installed base, but ten percent of vendor revenue.
Combined, eco-solvent and latex account for almost half of vendor revenue share of the wide format graphics print market, making it the largest revenue segment of the wide format print market.
UV-curable inks are instant dry, feature less maintenance between jobs, and enable productivity. In wide format graphics, UV-curable inkjet presses are productive and correspondingly offer the lowest cost of print—providing there is sufficient print volume. Initially offered in flatbed format to conform to conventional screen press formats, roll-to-roll (R2R) UV-curable printers now account for about one-third of all UV-curable wide format graphics printers sold.
The UV-curable market was hard hit by COVID-19, as demand for high-volume signage disappeared. There is a strong recovery in UV flatbed. IT Strategies projects this segment will be back to 2019 unit shipment levels in 2023/2024. It is the sheer number of competitors and productivity that makes UV-curable the strongest growing sector in wide format graphics.
Driving this growth is sub-$75,000 products on the low end. Those units are key to driving flatbed UV-curable unit growth, and account for over 40 percent of all low-end shipments. A use in the U.S. for these systems is lawn signage, the demand for which exploded during COVID-19 for graduations, fundraisers, and election campaigns.
The high-end flatbed unit shipments declined in 2022, due to lack of components required to ship those products. Additionally, the majority of systems today use LED curing lamps, which has reduced energy use/heat and extended the curing lamp life. Because these systems have a higher acquisition cost, print providers tend to hold on to them longer than other wide format systems.
In comparison to aqueous and eco-solvent/latex technologies, UV-curable flatbed installations account for about eight percent of the installed base of wide format graphics printers. They are closest in productivity to replace screen print. This is why a six percent growth in installed base 2023 to 2028 is projected and will drive seven percent growth in hardware and ink revenue.
IT Strategies segments R2R between low end of under $150,000 and high end of over $150,000. More than 90 percent of low-end R2R printers are priced under $75,000, some as low as $16,000.
The young base of low-end, R2R printers drives installed base growth since there retirements. This is unlike the more mature high-end R2R installed base, which is seeing higher rates of product retirements.
Because of the relatively young installed base, the compound growth of the installed base, and rising average monthly print volumes, hardware and ink revenue growth are expected to be strong through 2028 in both the low and high end of the R2R UV-curable market segment.
Soft Signage Dye-Sub
Wide format dye-sub printers are used for many applications with a polyester base, including sportswear apparel, fashion apparel, transfer to hard polyester surfaces, and soft signage.
The vast majority of low-end dye-sub soft signage printers sell for under $15,000. They are easy to buy, and provided there is a capable operator, offer among the highest margins of wide format output. The resurgence of trade shows helps fuel the use of existing installed soft signage printers, but this has not translated into growth of new dye-sub soft signage printer sales.
Aside from aqueous wide format printing, this is the only sector where unit volumes declined from 2021 to 2022.
The installed base of soft signage printers is recovering well from its 2020 COVID-19 decline. Over time IT Strategies expects the installed base to be relatively stable. The single biggest barrier to faster growth in soft signage is the high cost of material and skill required.
The rising productivity of hardware drives up average monthly print volumes, resulting in higher consumable revenues per printer. This gets hardware and ink vendor revenues back up to 2019 levels sometime after the forecast period.
Overall the wide format graphics market inkjet revenues are projected to grow five percent annually between 2020 and 2028. What’s interesting is the break out between ink technologies.
According to IT Strategies, relatively low-priced aqueous and eco-solvent/latex printers continue to dominate unit sales of wide format printers. In Chart G, you can see how they are capturing a combined share of the market at about 80 percent of units sold.
About the Author
Marco Boer, VP, IT Strategies has more than 25 years of experience in advising and guiding senior executives of Fortune 1000 and smaller companies to successful business solutions in emerging digital printing markets, Boer has a deep understanding of inkjet printing technology and its applications.
Aug2023, Digital Output