March 02, 2006
Flat Screen War Heats Up, LCD Catching Up (Reuters)
HONG KONG (Reuters) - Consumers are cheering their good
fortune, watching prices for big flat-screen TVs tumble while
makers slug it out to decide which display standard will become
dominant -- liquid crystal (LCD) or plasma.
With the price slide, demand is booming in the key
battleground for TVs -- flat screens in the 40-44-inch range --
and analysts say makers of liquid crystal displays (LCD) will
probably gain ground in a market that has been dominated by
plasma displays (PDP).
"Plasma display makers will do their best to cut costs and
fend them off, but LCD makers are investing aggressively to go
after the big-inch TVs and should be able to grab a good slice
of that market, especially at 40 inches and just above,"
Hisakazu Torii, director of TV market research at
Companies such as Japan's Matsushita Electric Industrial
Co. Ltd. <6752.T> and South Korea's LG Electronics Inc.
<066570.KS> have preferred to use plasma screens for 40-inch or
larger TV sets since they are easier to mass produce at larger
sizes, giving plasma a cost advantage over LCDs.
Plasma TV sets use tiny pockets of gases to display images,
while LCDs use crystals sandwiched between glass. LCDs last
longer than plasma screens but are not as bright, while plasma
has a wider viewing angle but consumes more power.
But prices for big LCD TVs will also come down sharply this
year, as massive production ramp-ups are enabling LCD
manufacturers to cut their own costs.
In 2005, the 40-inch LCD panel price dropped 36 percent,
faster than a 31 percent fall for 42-inch plasma screens.
DisplaySearch expects the panel prices to decline at a similar
pace this year, with 40-inch LCDs and 42-inch plasmas both
falling by about 25 percent.
"LCD panel prices will show a moderate fall in the first
half on demand ahead of the World Cup soccer tournament, but
the price fall will accelerate in the second half, given
ramp-up plans at makers such as LG.Philips LCD Co. Ltd.
<034220.KS> and Sharp Corp. <6753.T>," said Lee Min-hee, an
analyst at CJ Investment & Securities.
One company that sells both standards, Samsung Electronics
Co. Ltd.'s <005930.KS>, currently prices its high-definition
42-inch plasma TV set around $2,600 while its 40-inch LCD TV
set can be bought for less than $2,800.
"Anything 40-inch and above is still quite expensive for
the consumers. We are making very active investments to bring
the prices down," Chu Woosik, senior vice president for Samsung
Electronics' investor relations, said at the Reuters Global
Technology, Media and Telecoms Summit in Hong Kong.
DisplaySearch predicts LCD sets will account for 50 percent
of the 40-44 inch flat TV market by 2009, compared with 6
percent in 2005, while plasma's share will fall to 49 percent
in 2009 from 71 percent.
"We are still selling plasma, a few products, but our focus
is purely on LCD," Fujio Nishida, Sony Corp.'s <6758.T>
European president, said at the Reuters summit in Paris. "The
future is LCD. That's our decision."
However, plasma makers say their production cost-advantage
and plasma's clearer images will give them a secure place in
the fast-growing market. Makers such as Samsung SDI Co.
<006400.KS>, LG Electronics and Matsushita also plan heavy
investments to add capacity, raising concerns among analysts
about a potential glut.
"PDP makers have more room to cut prices by improving
technology and saving material costs," Chris Kim, Samsung SDI's
vice president of PDP sales and marketing, said at the Reuters
Hong Kong summit.
The market itself is rapidly shifting, with manufacturers
always looking ahead to bigger screens and better technology.
"Eventually PDP makers will have to move their focus to
above 50-inch when LCDs catch up in the 40-inch level," said
Michael Min, an analyst at Korea Investment & Securities.
In the race for an edge, panel makers are also investing in
organic light emitting diode (OLED) display, viewed as a
promising next-generation technology.
Self-luminous and paper-thin OLED screens produce brighter
images, respond faster and consume less power. Makers expect
OLED displays to replace LCDs on mobile phones starting next
year and eventually to compete with LCD and plasma for the
monitor and TV panel market.
U.S. researcher DisplaySearch expects the global OLED
market to grow to $5.1 billion in 2009 from $518 million last
By: Rhee So-eui and Nathan Layne
Copyright 2006 Reuters.
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