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LCD And Plasma Wars

Those following flat-panel display news coming out of Asia these days must have their heads spinning. Companies jump in and out of plasma manufacturing.

Those following flat-panel display news coming out of Asia these days must have their heads spinning. Companies jump in and out of plasma manufacturing; plasma fabs are sold to former competitors; new LCD fabs come on line, spewing out massive motherglass sizes; and traditional competitors band together to share IP and manufacturing capacity.

There's a real donnybrook going on here, and it's safe to say that no one can assume anything about the current and future flat panel marketplace —all bets are off:

  • Fujitsu announced in early February that it was effectively quitting the plasma business, selling all but a 19 percent stake in the jointly operated FHP factory, along with its plasma patents and IP, to partner Hitachi.
  • The next day, Fujitsu then announced the sale of its TFT-LCD business to Sharp, which flexed its muscles with a 65-inch LCD monitor at CES 2005.
  • Samsung and Sony formed a partnership to launch a Gen 7 TFT-LCD fab, resulting in the world's first 82-inch LCD monitor (announced in early March).
  • Panasonic, Toshiba, and Hitachi teamed to build a Gen 6 LCD fab that will start operation in 2006 for panel sizes up to 37 inches and possibly 42 inches.
  • Hitachi and Panasonic announced in February that they will cooperate on plasma manufacturing, possibly sharing IP and manufacturing capacity.
  • Several “who are those guys?” Chinese trading companies announce new low prices for Korean-manufactured LCD TVs and monitors at CES 2005 and in the following weeks, including 37-inch product for $2,999 and 40-inch product for $3,499.
  • For those readers still wondering: “Is plasma better than LCD, or vice-versa?” the performance arguments may not amount to much anymore. Instead, channel distribution and retail prices will carry the day. Based on those requirements, it looks like LCD is in full advance, with plasma holding the fort in larger sizes, but in slow but steady retreat in sizes up to and including 42 inches.

    The plasma manufacturers have certainly noticed the aggressive moves coming from the LCD camp and have put on a full-court PR press to convince journalists that plasma (1) does indeed have a future, and (2) that many of the problems attributed to plasma are now old wives' tales.

    Panasonic had a strong presentation along these lines at CES 2005 to talk about the extended life projections for its plasma products (60,000 hours), plus advanced energy-saving and phosphor-preserving modes. Tests by one of the presenters showed that the backlights in a major brand 37-inch LCD monitor actually aged much faster than expected, showing a marked drop-off in brightness after just a few hundred hours.

    Given that Panasonic is #1 in plasma shipments (producing more than 100,000 panels a month now), you'd expect it to ferociously defend its turf. And many of the Panasonic arguments in favor of plasma make perfect sense — one in particular: The cost of materials in a given plasma display panel is far lower than the same-size LCD monitor. Yet, a given piece of plasma motherglass can only yield a limited range of sizes, whereas a sheet of LCD motherglass can be chopped up into everything from 10-inch to 42-inch and larger sizes. The sweet spot for the consumer TV market is from 26 inches to 42 inches, and LCD has already been declared the winner at 32 inches and smaller.

    Like it or not, recent announcements crossing my desk show that the prices of LCD TV and monitor products continue to drop. Warehouse discounter Costco is now carrying a 26-inch LCD TV (analog only) for $1,200, and Westinghouse Digital announced a 42-inch integrated LCD TV at CES 2005 for $2,495. And Samsung's announcement of an 82-inch LCD panel isn't significant because there's a demand for such large panels, but because yields of smaller LCD panels will go up as economies of scale are realized and prices continue to plummet.

    Is there product dumping going on here? Not likely with plasma, which is edging ever closer to the sub-$1,000 cost barrier for 42-inch EDTV products. In this regard, plasma displays will continue to hold an edge over LCD for some time yet. Indeed, one analyst recently projected a finished cost of $800 for 42-inch panels by 2006.

    However, it's entirely possible that some portion of the LCD monitor and TV products coming into this country are being sacrificed as loss leaders in order to gain market share — a strategy that has been successfully used before by other flat panel manufacturers. If you're designing or building projects that use flat-panel displays, you're probably afraid to even open trade publications and check out the latest prices for LCD and plasma, wondering if you ordered the right product for your client — and who could blame you? Plasma may have been an attractive alternative to higher-priced LCD a few years ago, but the cost differential is getting smaller every six months.

    Empirical evidence from older installations is showing that LCD technology has the upper hand for many applications, particularly where the content being shown consists primarily of static, high-contrast images. Plasma was the only choice for many of these installs not too long ago; LCD monitors in usable sizes didn't even exist.



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