Digital Front Ends Feel the Impact of COVID-19

The market for digital front ends (DFEs) that provide workflow functionality and connectivity to digital printing equipment is being impacted by the disruption in equipment placements from the COVID-19 pandemic. In most situations, there is a 1-to-1 ratio of DFEs to digital printers. With fewer digital printers being sold, there is a reciprocal decline in DFE market.

Keypoint Intelligence forecasts the DFE market for production document, wide format sign and display, textile, as well as packaging printing segments. The impact, as we have seen throughout the pandemic, has not been universal with some areas struggling more than others.

• Production document, textile wide format, as well as wide format sign and display DFE markets experienced around a 20% decline from 2019 to 2020.
• Packaging DFEs used in corrugated, folding carton, flexible packaging, and label production experienced growth from 2019 to 2020 at around 11%.

Year-Over-Year Decline of DFE Markets

The current situation also illustrates the advantages of diversification. Vendors that have taken their core intellectual property for color management, screening, RIPing, and applied that to other production printing segments are better positioned during the pandemic. For many reasons, including the surge in online purchasing, all core packaging markets have increased this year and there is still opportunity for DFE vendors across these growing segments.

The greatest impact will be for vendors that supply DFEs to the production document market: sheet-fed and roll-fed digital printing equipment that produces page-based applications, such as business collateral and books. To offset declines, these vendors should look to sell additional software solutions/modules and services to existing customers. Cloud-based services for backup, syncing of assets, and color management are also particularly helpful to ensure business continuity as in-person restrictions are still in place for many businesses.

The road to recovery outside of the packaging segments will likely begin in Q3 of 2021. Most of the segments are expected to return to pre-COVID levels by the end of 2024, but DFE vendors must remain proactive in product development and segment expansion.

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