Flat Screen TVs Emerge as FPD Industry’s “Killer Application”

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LCD TV Penetration Rate Will Reach 40 Percent in 2007

Taipei, Taiwan, June 14, 2006 -- TV has become the killer application for flat panel displays and will experience a unit growth rate of 98 percent in 2006, according to speakers at FPD Taiwan 2006, which opened here today.

FPD TVs will account for 28 percent of the overall TV market in 2006, rising to 41 percent in 2007 and 50 percent in 2008, according to Deutsche Securities. “Clearly, it is TV that is driving [the FPD] market going forward,” said Nitin Kulkarni, president of Corning Display Technologies Taiwan.

This year, global LCD TV shipments will almost double to 48.5 million units, according to Displaybank, a Korean-based market research company. By 2010, annual unit shipments of flat screen TVs are forecasted to reach 100 million.

Sales of FPD TVs are also driving tremendous demand for glass substrates. From 2005 to 2007 global glass demand for flat screen TVs is expected to jump from 210 million square feet to 670 million square feet, according to Corning. During the same period average TV screen size will increase from 24.4 inch to 28.5 inch.

Also over the same period, CRT-based TVs will decline from 83 percent market penetration to about 63 percent. Japan is the market with the highest LCD penetration, with almost half of all TVs shipped in 2005 being LCD-based. The penetration rate is expected to reach 73 percent by 2007.

In terms of unit sales, Europe is by far the biggest market, accounting for 40 percent of all LCD TV sales in 2005 and a forecasted 37 percent share in 2007. Europe was followed by North America, with a forecasted 2007 market share of 23 percent. China will soon become a “huge region” for LCD TV sales, according to Kulkarni of Corning.

TFT-LCDs accounted for half of the total display market in 2003 and will account for two-thirds in 2007, according to market research firm iSuppli. However, new technologies will soon emerge as challengers in the TV arena. They include OLED, surface conduction electron emitter displays (SED), thick film dielectric electroluminescent displays (TDEL) and front projection systems.

Samsung and Seiko Epson have developed a 40-inch OLED demonstration panel for the TV market, but mass produced products will not likely be available for several more years due to technical and manufacturing challenges, said iSuppli. OLED offers unique advantages, including wide viewing angle, thin form, no color filter and no backlight.

Toshiba and Canon have a joint venture to produce surface conduction electron emitter displays, which have the advantage of high contrast ratios and low power consumption. Shipments are not expected until 2007 at the earliest.

Taiwan and Korea are the dominant forces in large TFT LCD panel production. Q405 market shares were 46.3 percent for Taiwan and 44.3 percent for Korea, according to iSuppli. In comparison, Japan’s market share was 6.3 percent, with China holding 3.2 percent.

Materials comprise almost 71 percent of the total cost of a 40-inch LCD module, according to Displaybank. Manufacturing costs comprise just over 29 percent of the cost. Further, Taiwan, Korea and China have failed to develop their own suppliers of materials and production equipment for FPDs, increasing their reliance on Japanese companies, according to Deutsche Securities.

FPD Taiwan 2006 runs June 14 to 16 at the Taipei World Trade Center, Taipei, Taiwan.

SEMI is a global industry association serving companies that provide equipment, materials and services used to manufacture semiconductors, displays, nano-scaled structures, micro-electromechanical systems (MEMS) and related technologies. SEMI maintains offices in Austin, Beijing, Brussels, Hsinchu, Moscow, San Jose (California), Seoul, Shanghai, Singapore, Tokyo and Washington, D.C. For more information, visit www.semi.org.


Scott Smith/SEMI US
Tel: 408.943.7957