Last month in the PDP Watch section of Projector Monthly, we ran a story looking at how PDP manufacturers plan to boost profitability in preparation for the impending 40+-inch LCD onslaught into the large TV display space (see Projection Monthly, August 2005, p. 44). This month, we delve a bit deeper into the market forces driving the move and the technology side of this strategy as major PDP players, like LG, Samsung and Matsushita, introduce new single scan drive to further reduce costs and boost profits as they ride the price curve down toward consumer nirvana.
On the LCD side, driving the move to larger panel sizes is the continued price decline in the 27 to 37-inch LCD-TV market. For example, we reported last month that the ASP for 37-inch LCD-TV panels dropped $25 to $825 in the first half of July. DisplaySearch said the ASP declined $20 to $810, with the price expected to fall to $700-$730 by year end.
This lower LCD module revenue translates into squeezed profits for manufacturers. Consequently, panel makers look to the larger 40- and 42-inch display sizes in what appears to be a category ripe with profits as consumers make the change to DTV-based displays. Indeed LCD fab planners have been ramping up production at gen 6 plants and investing heavily in new gen 7 facilities that produce an efficient six to eight 40-inch-plus panels from a single motherglass (see Projection Monthly LCD fab investment story, August 2005, p.55). According to conventional thinking, this move will boost efficiencies in LCD production, giving the flat-panel makers higher profits as long as ASPs hold the line.
But, as we mentioned in our Projection Monthly financial analysts report last month, the very large TV space is dangerous territory for LCD players, as it impinges directly on other strong technologies, namely PDP and RPTV, both expected to vie for market share, putting continued pressure on the very large display category.
To support the coming price war, PDP makers have been investing in technology improvements that directly reduce cost to manufacture, and leading the way is the move to single scan PDP technology. We had a conversation with industry veteran, Jim Noeker, Panasonic’s sr. digital engineer, to get a sense of the trade-offs of the single scan approach.
Noeker starts off with the obvious cost savings in single scan technology â€“ half the number of drivers are needed to address the plasma cells. â€œYou either mount them on the top or the bottom of the display in a single scan system,â€ Noecker said. â€œWhile it’s true, the driver count is reduced by half, it doesn’t translate into half the BOM cost,â€ Noeker continued. â€œThe drivers in a single scan system require higher current to drive longer electrodes (essentially the full height of the display.) In a dual scan system, drivers on the top and bottom meet in the middle and only need to support current for half the display height. These higher current drivers will probably cost a bit more than their lower current cousins, but there still should be a significant reduction in driver costs.â€
That brings us to a second cost savings in single scan systems â€” support for single electrodes simplifies manufacturing. In a dual scan system, top and bottom electrodes need to join together in the middle of the display at sub-pixel tolerances. â€œSince there is no break in the data electrodes using a single scan system, the manufacturing process is simplified with some probable cost-down effects,â€ said Noeker.
One other potential trade-off in moving to a single scan system may be loss of display time if the address duty cycle remains the same. â€œA single scan means using half the drivers, which essentially doubles the addressing time,â€ Noeker said. In a dual scan system, having twice as many drivers means the cells are addressed twice as fast, leaving more of the TV frame rate (1/60 second or roughly 16.67ms) to dedicate to the display period. â€œThis extra display time can be used to increase brightness or improve sub-field gradation for better motion rendering,â€ Noeker continued. But, he said, designers can get around this problem by increasing the addressing speed, depending on the panel characteristics and electronics.
On the application side, LG Electronics developed the industry’s first 42-inch single scan technology in July 2004 and a 50-inch PDP model in April 2005. The cost-saving effect reduced the driver IC cost by half, with a reported total system cost savings of up to 30%. But based on some industry sources, we think that figure is a bit high.
LG also claims to have increased light emission efficiency by more than 30% through a new discharge cell structure and gas development.
Samsung SDI also adopted a single scan technology and is applying it to nearly 100% of its V4 lines. The company also plans to develop V5 (50-inch HD PDPs embracing single scan technology) and V6 products at year end and next year.
On another technology front, Samsung is shifting the physical structure of its PDP cells from square to octagon, using a home-grown technology, called â€œHERO Cell,â€ an acronym for High Efficiency Rib and Optimized electrodes. The result is an expansion of light emission areas and advancement in overall discharge efficiency, according to the company. All this, according to the company, translates into a brighter picture with better contrast than LCD â€” helping to secure the PDP image advantage (see related story, Projection Monthly, July 2005, p. 96).
In what some consider another battlefront between display technologies, the ability to display 1080p native images or â€œfull HDâ€ is heating up in the large display category. To that end, Samsung also claimed that it has developed its own PDP driver IC that allows a reduction in the number of driver ICs used to drive full-HD TVs. According to Samsung, the new driver IC can save 30% of total panel manufacturing costs. This announcement comes on the heels of our report in July that Matsushita, Hitachi and Pioneer all have plans for PDPs with 1080p or full-HD resolution (see Projection Monthly, July 2005, p. 90).
Japan’s leading PDP maker, Matsushita, is also driving hard in the PDP category. In May, we reported new plasma TVs, in 37-, 42- and 50-inch screen sizes, all featuring Matsushita’s latest PEAKS (Picture Enhancement Accelerator with Kinetic System) technology that uses a newly developed plasma panel, deep black filter, and real black drive system. The deep black filter attached to the front protection glass reduces light transmittance, effectively suppressing external glare and reflection. The real black drive system has realized a high contrast ratio of 3000:1 in the dark environment, creating deeper and richer blacks, says Panasonic. When asked, the company was mum on the issue of moving to a single scan technology.
To further improve efficiencies, Panasonic will open what it claims to be the world’s largest manufacturing facility for plasma display panel TVs in September. Matsushita also plans to leverage its strong brand name to extend the sale beyond just the display. â€œAfter consumers buy our plasma TVs, we will likely be able to sell them related audiovisual products,â€ said Kunio Nakamura, president of Matsushita Electric Industrial Co. â€œWe aim to launch a major offensive in North America with our audiovisual equipment, and will try to boost our share of the North American plasma TV market to 40% in the current business year, from 30% in fiscal 2004.â€
Masaaki Fujita, head of Matsushita’s plasma TV business, told Reuters News Service he now expects the global market to reach 6M units in the year to March, one million above a prior forecast and more than double the 2.7M units sold in 2004/05. Fujita expressed confidence that Matsushita would be able to secure 35% of the global market.
The Matsushita estimate comes one quarter after an IDC projection of 4.7M plasma display panels to ship worldwide this year (three months shy of the March â€˜06 period covered by Matsushita), as reported in IDC’s “Worldwide PDP-TV 2005-2009 Forecast and 2004 Vendor Sharesâ€ report (April 2005).
The research company did say plasma technologies will continue to dominate the 42-inch-and-greater flat-panel category in both price and sales volume, and from 2005 through 2009, will increase by a factor of three, to over 14M displays at the end of 2009.
The Koreans are more bullish in their numbers, as Samsung SDI forecasts that PDP module unit shipments worldwide will more than double this year, to 7.2M from last year’s 3.5M. The company intends to ship 2.2M (about 31%) of those units. Separately, Samsung Electronics said it is equipping an LCD production line that will cost approximately $975M and will begin production next April. The facility will have the capacity to make 45K sheets per month for 40- and 46-inch LCD panel production.
Samsung SDI is now running three PDP production lines at its facility in Cheonan, South Korea, for a total capacity of 250K units a month. News reports also indicated the company may be considering further expansion of production capacity using a larger glass substrate.
2004 Global Plasma Panel Shipments
Samsung SDI Co.
Matsushita Plasma Display Panel
Fujitsu Hitachi Plasma Display
Global shipments of plasma panels surged 107% in 2004 to 3.6M units. Source: DisplaySearch
Finally, DisplaySearch reported its 2004 PDP worldwide shipments and market share data, stating global shipments of plasma panels soared 107% to 3.6M units in 2004. South Korea’s Samsung SDI Co., which almost doubled its output capacity, became the industry leader for the first time, with its market share rising 5.3 percentage points to 24.4%.
LG Electronics Inc., another South Korean manufacturer, moved up to second place thanks to its vigorous capital investment and increased sales of plasma TVs in North America. Its market share climbed 5.7 percentage points to 22%.
Third-ranked Matsushita Plasma Display Panel Co. saw its market share edge up 1.6 percentage points to 20.1% as it opened a new production plant and sales to its corporate group increased. The plasma TVs made by Matsushita Electric Industrial Co. captured the largest share of the domestic market.
Fujitsu Hitachi Plasma Display Ltd. fell from first place to fourth as its modest level of capital investment caused its market share to drop 6.8 percentage points to 18%. Pioneer Corp. moved up to fifth place from sixth after taking over NEC Plasma Display Corp, with its market share rising 4 percentage points to 12.4%.