Alan Wise

World LCD-TV production news

All,
Here is a view on the world LCD-TV market and production.
It mostly talks about Sharp's domination of the market.
It also states that no company has risen to challenge their position (Sony is half trying). It's my bet that Korean manufacturer LG Electronics will be this challanger.

Happy reading, Al. Wise


1) World LCD TV Output to Rise 112% in 2004; Tight Supply to Keep Prices High
May 12, 2004 (TOKYO) -- Worldwide production of liquid-crystal TVs*1 skyrocketed in 2003, up 163% to 3.63 million units, according to Nikkei Market Access.
The output was boosted by manufacturers of TVs making strong showings in the LCD TV market at the year-end sales season and by IT equipment manufacturers such as Dell Inc entering the market.
Production will continue growing quickly in 2004, but industry observers can’t say by how much. Given the tight demand-and-supply situation for large thin-film transistor (TFT) LCDs for TVs, prices are unlikely to fall any time soon. Nikkei Market Access forecasts a year-on-year increase of 112% to 7.69 million units.
Although some observers believe that the Summer Olympics in Athens will accelerate demand for LCD TVs in 2004, the main impact will likely be an early surge in demand that does not translate into greatly expanded production over the full year.
Continuing High Prices Likely to Hold Back Demand
The LCD TV market was buoyant in 2003. The two largest TV manufacturers, Sony Corp and Matsushita Electric Industrial Co, Ltd, threw their weight into the year-end sales season with strengthened LCD TV offerings in an effort to catch up with frontrunner Sharp Corp. Sharp retaliated by enhancing its own product lineup.
This was followed by moves by Dell and various Taiwanese TV manufacturers debuting LCD TVs. The result was a rapid increase in production of TFT-LCDs for TVs from the second half of 2003 and continuing into 2004.
Looking at trends since the 2003 year-end sales season, while the LCD TV market has grown sharply, sales figures have not risen as much as TV and LCD manufacturers had expected. In the first quarter of 2004, LCD manufacturers, particularly those in Taiwan, appeared to be overstocked with TFT-LCDs for TVs. All the same, TV manufacturers expect accelerating demand for LCD TVs in 2004.
From figures published by the Japan Electronics and Information Technology Industries Association (JEITA) on domestic shipments of consumer electronic equipment, the results for TV shipments show that Japan has a growing market for flat-panel TVs, including plasma-display panel (PDP) and LCD TVs, but shipments for the TV market as a whole actually declined in 2002 and 2003. This was largely because flat-panel TVs, sexy as they seem, are also costly.
LCD TVs would sell like hotcakes if they were more affordable. But prices are unlikely to come down much in 2004.
With demand still strong for TFT-LCD panels for PCs, LCD manufacturers are concentrating on production for PCs rather than for TVs with their poor screen-yield rates. Prices of TFT-LCD panels for TVs are not expected to drop any time before the summer of 2004. No major price fall is likely thereafter either.
Apart from the high prices, Sharp’s dominance in the LCD TV market could also dampen the rebound on the manufacturing side. Sharp has a massive share of the LCD TV market, and has firmly established itself as the top brand. Its products sell well in the retail market, despite being more expensive though similar in performance to their rivals.
A single dominant vendor is a deterrent to growth in the audio-video equipment market, but a contender that could challenge Sharp’s dominance has yet to appear. Meanwhile, as some industry observers believe, the market may see some TV makers concentrating on PDP TVs to avoid competing with Sharp in the LCD TV field. From these observations, LCD TV output in 2004 could surpass 8 million units if prices come down considerably. But because lower prices are unlikely at present, we forecast a figure of 7.69 million units.
Sharp Shows its Strength in Vendor Rankings
Looking at the brand rankings in terms of LCD TV production volumes, Sharp still holds a strong position, although its share is narrowing. In 2003, Sharp had a 40% share. It has resolute brand strength in the 30-inch and larger TV market. Many in the industry believe Sharp’s strength will remain unchallenged for quite some time.
Sony grew its share considerably and reached second place in 2003, but it failed to perform up to expectations in the 2003 year-end sales season. Rather than gaining on Sharp, Sony actually lost further ground in the first quarter of 2004, some industry pundits believe.
PDP TVs, on the other hand, are gaining a solid position as high-end products. Unlike TFT-LCDs, PDPs have limited applications, so PDP manufacturers may reduce panel prices rather than relinquish the big catch of large-screen TVs to liquid crystals. If LCD TV prices remain high, PDPs could gain greater clout in the 30-inch to 40-inch bracket, previously considered the province of LCD TVs.
*1 Includes LCD TVs with a screen size of 10 inches or larger but excludes monitors for PCs equipped with a TV tuner. Panels marketed by PC vendors as LCD TVs are therefore counted as such, but panels sold as LCD monitors, even if equipped with TV functions, are not included in the LCD TV category.
(Ken Nakamura, Nikkei Market Access)

Al Wise
Nashua, NH.