Hello, thank your for the question. I have profiled the major players
in the LCD television market and isolated articles on future market
trends and manufacturing costs.
This information should give you a strong basis to judge the ability
of the LCD manufacturers to meet the cost improvement curve in the
future. I hope this helps. Please request clarification if you require
additional assistance with your quetion.
____________________________________________________
TOP PLAYERS:
Business Week
APRIL 4, 2005
http://www.businessweekasia.com/magazine/content/05_14/b3927003.htm
"Every day, across Asia, thousands of liquid-crystal and plasma
displays roll out of factories owned by Samsung, Matsushita (MC ),
Sharp (SHCAY ), Pioneer (PIO ), LG, and five Taiwanese companies.
These are among the world's top suppliers of the elegant thin
televisions that are now streaming into homes everywhere. The Asians
have committed $35 billion in flat-panel capacity in 2004 and 2005.
And as the TV manufacturers place their bets, legions of suppliers of
glass, semiconductors, and other components are revving up their own
production lines"
DELL AND HP:
http://www.businessweekasia.com/magazine/content/05_14/b3927003.htm
"Dell's low cost structure, peerless supply chain, and direct-sales
model let it drastically undercut rivals' prices. In the fall it
introduced high-definition 42-inch plasma sets for less than $3,000,
with incentives, while Sony and others were selling similar models for
more than $4,000. In a matter of months, Dell seized 10% of this
important slice of the plasma market in the U.S., according to
researcher DisplaySearch in Austin, Tex. The Asians dropped their
prices quickly in response. But Dell intends to keep up the pressure."
http://www.businessweekasia.com/magazine/content/05_14/b3927003.htm
"The return of American TV brands sets the stage for an epic battle
between the forces of commoditization and manufacturing innovation. In
the first camp, Dell and HP are already two of the world's biggest
buyers of flat-panel monitors, semiconductors, and other parts for
PCs, so they have great leverage over the same Asian suppliers when it
comes to sourcing thin-screen televisions. In the innovation camp,
Japanese, Korean, and Taiwanese companies will spend almost any sum to
dominate flat-panel TV production. With their prowess in
manufacturing, they gain an edge in design, engineering, and product
innovation that the Americans may have trouble matching."
http://www.businessweekasia.com/magazine/content/05_14/b3927003.htm
<<The surge in investment and proliferation of suppliers have driven
panel prices down to levels unthinkable even two or three years ago.
That has opened the door to a set of competitors the Asians never
expected to face: Dell Inc. (DELL ), Hewlett-Packard Co., (HPQ ) and
others in North America. They are making a concerted push in flat TVs,
sourcing the panels from Asia and using the same global supply-chain
wizardry they have employed so effectively in PCs, printers, and other
products. Sylvania and Philco are long gone, and there is no sign that
the mass production of giant flat panels will migrate to North
America. But the American TV industry may be poised for a startling
resurrection. "We're going to raise people's eyebrows this year," vows
Gerry Smith, Dell's Singapore-based vice-president and general manager
for displays. "We are going to be successful in this market.">>
PHILLIPS:
http://www.businessweekasia.com/magazine/content/05_14/b3927003.htm
<<A Seoul-based joint venture owned by LG Electronics and Royal
Philips Electronics (PHG ) is spending $5.1 billion to create the
world's largest plant for liquid-crystal displays. Sony Corp. (SNE )
and Samsung are teaming up in a $2 billion LCD venture. AU Optronics
Corp. (AUO ), partly owned by Taiwan's BenQ Corp., just started
production at a new $2.5 billion complex big enough to house six
Airbus A380 jumbo jets. Matsushita Electric Industrial Co., which has
spent billions to ramp up in plasma screens, is sinking $1.3 billion
more into a new plant just to provide the chips for thin TVs. "This is
the chance of a lifetime," says Fumio Ohtsubo, a senior managing
director at Matsushita. "Companies that lose out now will find it very
difficult to recover.">>
Philips Intros New LCD TV Chip
By Jessica Davis -- Electronic News, 3/23/2005
http://www.reed-electronics.com/electronicnews/article/CA512455.html?industryid=21367
<<Royal Philips Electronics is offering a new single-chip device
designed to reduce the costs and simplify the development of midrange
LCD televisions.
"This new chip provides a better picture quality processing than the
original one,? he said. ?With this chip we have moved video processing
to digital domain.?
The new chip, TDA 15600, offers advanced picture improvement
de-interlacing with edge-dependent de-interlacing (EDDI), detail
adaptive noise reduction and the option of integrated 3-D comb
functionality. Other features of the TDA15600 include video decoding
and sound processing. All these features improve the quality on
screens up to 30 inches.
Philips hopes the product, available in Q2 2005 with volume production
in Q1 2006, will tap into the fast growing LCD TV market. Market
research firm iSuppli is projecting the market to grow from 8.6
million units shipped in 2004 to 36.7 million units shipped in 2008.
Philips is claiming the chip?s high level of integration offers
customers the lowest bill of materials for midrange LCD TVs. The
company is also offering a reference design, available in Q3, to help
improve development time and lower manufacturing costs.>>
SHARP:
Time 5/9/05
http://www.time.com/time/asia/magazine/printout/0,13675,501050509-1056339,00.html
"Sharp is now the world's biggest seller of LCD televisions,
accounting for one in four of all the LCD sets sold globally each
year. And while almost every other Asian electronics manufacturer has
been hit lately by plummeting prices and oversupply, Sharp continues
to gather momentum. Last week, Sony reported a loss of $320 million in
its consumer electronics division, while Sharp announced all-time
record operating profits of $1.4 billion. "
http://dailynews.muzi.com/ll/english/1353015.shtml
"Osaka-based Sharp Corp., for example, has taken the world-wide lead
on LCD televisions. Its net profit rose 32 percent for the nine months
ended Dec. 31. In Japan, the second-largest market for gadgets, local
brands still dominate."
http://msnbc.msn.com/id/7655601/
"LCDs are coming up quickly as plasma competitors, although they are
still more costly and not quite up to plasma?s richness of image. But
LCD?s capacity for extremely high resolution, as in the Sharp?s
LC37GD4U,will likely trump plasma in the long run."
----------------------------------------------------------------------------------------
GENERAL MARKET TRENDS:
LCD manufacturing costs down 41%
http://www.iht.com/articles/2005/05/03/bloomberg/sxquanta.php
LCD TV's are 44% cheaper this quarter;
http://www.businessweekasia.com/magazine/content/05_14/b3927003.htm
<<Thanks in part to the arrival of all these commodity players, the
flat-panel TV industry has already gone through its first bout of
overcapacity and consolidation. Prices on 32-inch LCD TV panels are
44% cheaper than they were in the first quarter of last year, and they
could drop 20% more in the year ahead, according to DisplaySearch. The
Asians are feeling the pain. One example: Samsung's fourth-quarter
profits from high-end LCDs dropped 99%, to about $7 million.>>
Should account for 20% of TV's by 2007;
http://www.businessweekasia.com/magazine/content/05_14/b3927003.htm
<<If the market takes off the way many analysts anticipate, demand for
advanced materials could also soar. The glass used in LCD panels is so
sophisticated that only three companies make it: America's Corning and
Japan's Asahi Glass and Nippon Electric Glass. Corning, with over 50%
of the market for flat-panel glass, expects to spend $1.8 billion
expanding capacity in the three-year period ending in 2007, primarily
in Asia. James B. Flaws, Corning Inc.'s (GLW ) vice-chairman and chief
financial officer, predicts that flat panels could account for 20% of
TVs sold around the world by 2007. For that to happen, he concedes, TV
makers must push flat TV prices down to the point where they are only
50% more expensive than CRT models. That means accepting lower prices
for glass, too, but Corning says lower manufacturing costs and higher
volumes should offset that.>>
World Production of Liquid Crystal Display Television to Reach
25million in the Year 2007
http://www.optronics.co.jp/en/headlines/200406.php
"* Fuji Chimera Research Institute has published "Worldwide
Electronics Market 2004 - Comprehensive Study", an investigative
report on the world market of 50 leading electronics devices and
components. According to the investigative report, world production
for the year 2007 will be- 25million for Liquid Crystal Display
Television (6 times increase compared to year 2003), 6.4million for
PDP Television (5 times increase compared to year 2003) and
55.50million for DVD video recorders (12 times increase compared to
year 2003).
* As for Liquid Crystal Display Televisions, whereas the dominant
models for year 2003 were small models under the size of 20inches, it
is forecasted that the dominant models for year 2005-2006 will be
shifted to size 30-32inch models. The Japanese manufacturers have
begun consignment production to Taiwanese corporations in aim to
reduce manufacturing costs, and it is seen that the domestic
production ratio will be largely reduced. Any inquiries to the
"Worldwide Electronics Market 2004 - Comprehensive Study" could be
made to the First Department of Research and Development, Fuji Chimera
Research Institute (contact; Fukui, tel; 03-3664-5815). "
Larger LCD TV's on the way- will help in competition with plasma TV's
which had dominated the larger HD market.
http://en.wikipedia.org/wiki/Liquid_crystal_display_television
"For a long time it was widely believed that LCD technology was suited
only to smaller sized televisions, and could not compete with plasma
technology at larger sizes. This belief has been undermined by the
announcements of ever-larger panels by companies such as Sharp
Corporation, Samsung and LG.Philips. In October 2004, 40" to 45"
televisions were widely available and Sharp Corporation had announced
the successful manufacture of a 65" panel. Also in 2004, Samsung and
Sony joined forces to build a factory in South Korea, intended to
produce 60,000 panels a month, and in March 2005, Samsung announced an
82" HDTV TFT Panel. The main manufacturers have all pledged to invest
billions of dollars in LCD production over the next few years, with
televisions expected to be a key market."
HFN
FLAT-PANEL PRICES FLATTEN OUT LOWER MANUFACTURING COSTS AND NEW BRANDS
ARE AFFECTING THE ECONOMIC LANDSCAPE OF THE CATEGORY
August 16, 2004
LexisNexis
<<"LCD television pricing is dropping as major panel suppliers are
ramping up their production," said Sung Park, analyst with
DisplaySearch. "Korean and Taiwanese manufacturing plants are
producing larger substrates, which can be made into larger-sized and
more panels. We will see more aggressive pricing next year as Korean
companies such as Samsung and LG step up their panel production as
well," she added.
According to DisplaySearch's research, the average price of a 30-inch
LCD television in January was $2,929, which has slipped to $2,525 in
only seven months.
This price compression is being led by new players in the market that
manufacture or source manufacturing in low-cost Asian countries.
Westinghouse Digital Electronics scrapes the bottom of 30-inch
category with its $1,760 LCD that just hit the shelves at Best Buy,
according to Park. Syntax came to market earlier this year with the
lowest-priced 27-inch model, its $1,349 LCD TV, compared with the
market average of $1,794, Park added.
"The feeling in the LCD marketplace is that brands have not promoted
mass adoption, because the price is too high. Our model is simple:
When the costing is available [at the manufacturer level], we take it
[LCDs] to the street," said Douglas Woo, president of Westinghouse
Digital. Westinghouse's panels are manufactured at the Taiwanese
Chimei Optimo Electronics plant.>>
<<As factories begin to produce these larger substrates, there will be
a greater percentage reduction on prices of larger LCD televisions
(22-plus-inch screens), noted Sanduski. He expects LCD television
prices to drop between 10 percent and 20 percent by December.
Sanduski further attributed the price declines to excess LCD
television inventories, as manufacturers' LCD sales expectations were
not quite met over the past year. "We received large orders from
retailers for the holidays, but did not sell as many [LCDs] as
expected. In the springtime we had to cut prices to spur demand," he
said. Samsung reduced its 15-inch LCD price by roughly $50, its
20-inch by about $100, and its 32-inch by up to $500, Sanduski added.
Caption(s): Syntax is attempting to reach a bargain-hunting niche via
an August promotion for its Olevia 30-inch television on the Home
Shopping Network. / Syntax's $1,799 30-inch LCD television is priced
well below the category average. / Westinghouse's 30-inch $1,760 LCD
TV is the lowest-priced on the market, according to DisplaySearch.>>
----------------------------------------------------------------------------------------------
MANUFACTURING COSTS:
Flat-Panel Prices Flatten Out - Lower Manufacturing Costs and New
Brands are Affecting the Economic Landscape of the Category
http://westinghousedigital.com/press/hfn081604.shtml
<<As Chinese and Taiwanese factories are beginning to produce LCD
television panels at a lower cost, new brands are putting the squeeze
on the big players by entering the market with significantly
lower-priced models.
"LCD television pricing is dropping as major panel suppliers are
ramping up their production," said Sung Park, analyst with
DisplaySearch. "Korean and Taiwanese manufacturing plants are
producing larger substrates, which can be made into larger-sized and
more panels. We will see more aggressive pricing next year as Korean
companies such as Samsung and LG step up their panel production as
well," she added.
According to DisplaySearch's research, the average price of a 30-inch
LCD television in January was $2,929, which has slipped to $2,525 in
only seven months.
This price compression is being led by new players in the market that
manufacture or source manufacturing in low-cost Asian countries.
Westinghouse Digital Electronics scrapes the bottom of 30-inch
category with its $1,760 LCD that just hit the shelves at Best Buy,
according to Park. Syntax came to market earlier this year with the
lowest-priced 27-inch model, its $1,349 LCD TV, compared with the
market average of $1,794, Park added.>>
Flat-Panel Prices Flatten Out - Lower Manufacturing Costs and New
Brands are Affecting the Economic Landscape of the Category
http://westinghousedigital.com/press/hfn081604.shtml
<<As factories begin to produce these larger substrates, there will be
a greater percentage reduction on prices of larger LCD televisions
(22-plus-inch screens), noted Sanduski. He expects LCD television
prices to drop between 10 percent and 20 percent by December.
Sanduski further attributed the price declines to excess LCD
television inventories, as manufacturers' LCD sales expectations were
not quite met over the past year. "We received large orders from
retailers for the holidays, but did not sell as many [LCDs] as
expected. In the springtime we had to cut prices to spur demand," he
said. Samsung reduced its 15-inch LCD price by roughly $50, its
20-inch by about $100, and its 32-inch by up to $500, Sanduski
added.>>
http://msnbc.msn.com/id/5024734/
"New LCD television manufacturing technology is allowing for larger
screen sizes in addition to higher resolution devices. Samsung
announced the introduction of the world?s largest LCD TV available to
the consumer: the 46? LTP468W with a whopping 1,920 x 1,080p
resolution (great for a big-screen TV) and a matching price tag of
$9,999."
Efficient Manufacturing Cuts LCD Production Cost In Half
April 17, 2005
http://hightechmagazine.com/managearticle.asp?C=220&A=6730
"Market research firm Displaysearch expects manufacturing costs for
LCD panels to drop by 62 percent in the next four years. Count in the
natural price erosion in the industry and $100 17-inch displays
suddenly appear on the horizon. After experiencing a rocky second half
of 2004, the global LCD is again steering into a time of recovery.
Unlike in the past, the new growth will be driven through cost
reduction made possible due to the enormous investments panel makers
made in the past years and surfacing depreciation effects. According
to Displaysearch analyst Jin Kim, manufacturers are also taking
advantage of higher yields in their newer fabs.
Kim expects manufacturing cost to drop by about 62 percent until 2008,
which will add to the typical price erosion that advances usually in
an even faster pace. He believes that consumers already have seen the
effects of this trend with 15-inch displays hitting a $199 price
point, 17-inch models retailing for as low as $299 and mainstream
19-inch displays for $399."
http://hightechmagazine.com/managearticle.asp?C=220&A=6730
"For the long term, the outlook for the industry is substantial growth
and consumers can expect further price erosion. According to Kim,
15-inch panels currently are available for about $100, which could
translate into $150 low-end displays in the near future. Four years
down the road, 17-inch models could be available in this price range
or even at the $100 mark.
"It is too far out to give a reliable forecast. But a $100 17-inch
display by 2008 is quite possible," Kim said."
http://www.pcmag.com/article2/0,1759,1213248,00.asp
"Another factor is the drop in manufacturing costs for LCD panels,
which are the most expensive components in LCD monitors. According to
market research firm iSuppli/Stanford Resources, the average
manufacturing cost of a 15-inch LCD panel was just over $180 in 2001,
dropping to about $140 last year.
These price reductions are due largely to improved manufacturing
efficiency. In the past year, two Generation 5 LCD production lines,
which can handle glass sheets larger than 1 meter square, were
launched. Bigger sheets mean more panels per sheet and more efficient
production. Five more Generation 5 plants are slated to open in Korea
and Taiwan this year.
Part of the larger capacity is aimed at the growing LCD television
market, which demands larger screens, but much of this production will
go into desktop monitors."
http://www.carl-nelson.com/news.htm
"Got a great new LCD idea? It better be cheap. Market research firm
Displaysearch expects manufacturing costs for LCD panels to drop by 62
percent in the next four years."
BLOOMBERG
Thursday, Feb 17, 2005,Page 10
http://www.taipeitimes.com/News/biz/archives/2005/02/17/2003223421
"The slide in prices of some liquid-crystal displays (LCD) used in
computers and televisions halted in the first two weeks of this month,
an analyst said.
The price of a TV screen measuring 32 inches diagonally stabilized at
US$650, unchanged from two weeks ago, Taipei-based WitsView Technology
Corp (0´º¬?) said on its Web site. The price of a 17-inch monitor
screen held firm at US$152 while 15-inch panels used in notebook
computers dropped US$5 to US$128.
Prices of screens in the US$36 billion industry dominated by Samsung
Electronics Co of South Korea have tumbled more than a third since the
middle of last year after 18 months of gains.
Suppliers may post losses if the price of a 17-inch screen falls below
US$180, WitsView said last year.
AU Optronics Corp (??F¥? the world's third-largest LCD maker, posted
its first loss in two years in the fourth quarter after a supply glut
drove prices down. The company had an unaudited loss of NT$2.23
billion (US$70 million), after net income of NT$7.6 billion a year
earlier."
Emerging Technologies: Flat Panel Televisions - US - July 2004
http://www.gii.co.jp/english/mt21392_flat_panel_televisions.html
"Consumer attitudes and preferences have greatly impacted the way in
which the flat panel television market has developed. Suppliers have
developed products to align flat panel televisions with stylish
consumer tastes. However, with numerous entrants in the market,
suppliers will likely encounter periods of oversupply as the market
emerges, resulting in discounting and other pricing activities at
retail. Evidence of this includes a Wal-Mart return of nearly $200
million in overstocked LCD televisions to Samsung in 2004. In the end,
discounting to relieve overstocks will result in lower prices.
Production efficiencies will also contribute to declining prices.
Overall, this emerging technology is evidently on the path to becoming
a mainstream category."
_______________________________________________________
ADDITIONAL RESOURCES:
Liquid Crystal Institite
http://www.lci.kent.edu/
How LCDs Work
http://electronics.howstuffworks.com/lcd.htm
--------------------------------------------------------------------------------------------
SEARCH STRATEGY:
Google search terms;
-"manufacturing costs" "lcd televisions"
-"market research" "lcd televisions"
- "lcd television manufacturing"
-"lcd television prices"
-"Liquid crystal display television" manufacturing
LexisNexis Industry Search |
