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Plasma, LCDs Race to Conquer Big-Screen TV Market

September 14, 2005

TOKYO — Until recently, buying a big, thin-screen television boiled down to choosing between a projection set, with its quality limitations, and a pricey plasma TV. But not anymore.

Producers of liquid crystal displays (LCDs), armed with new technology and more efficient factories, have declared that they are ready to conquer the lucrative segment of televisions with 37- and 42-inch displays.

“With the seventh-generation factory (which starts production in 2006) it’s clear we can capture the 42-inch size,” Bruce Berkoff, executive vice president for marketing at the world’s biggest LCD maker, LG.Philips LCD, said at the Reuters Asia Technology and Telecoms Summit in Tokyo.

He pointed to the LCD makers’ track record of lower prices with each new generation of the production process.

“A few years ago, the whole industry said LCDs were good for 20 inches and below…. Last year, LCDs were good for 32 inches and below. Clearly, as we ramp our sixth-generation factory this year, we’re ready to capture 37-inch TVs,” Berkoff added.

Plasma display makers, however, are more confident than ever that they can withstand the attack. They are cutting costs and moving to even bigger television sizes where LCD makers cannot follow.

GOOD FOR CONSUMERS

“We changed a lot of software and components at the back of the panel. This will lead to cost-competitiveness and reliability and a more stable product,” Chris Kim, marketing and sales vice president at Samsung SDI, said at the summit.

Samsung SDI, the world’s top plasma display maker, makes one of every three plasma panels sold today.

Kim cited data from research group DisplaySearch showing that by 2008 the manufacturing cost for a 40-inch LCD panel will be about $645, compared with just $454 for a 42-inch plasma display panel.

The plasma-LCD rivalry is good news for consumers.

A 42-inch thin TV set that cost $5,000 last year now sells for less than $4,000 and some models are even below $3,000, Kim said.

The price of a 42-inch set is forecast to dip well below $2,000 by 2008, helping plasma TVs to more than quadruple their sales to 12.3 million units and grab half of the market for TV sets of 40 inches or more, compared with 40 percent now, DisplaySearch said.

Japan’s Matsushita Electric Industrial Co., which owns the Panasonic brand and makes both plasma displays and the TV sets that use them, says it needs to cut the price per inch of a plasma TV screen to 5,000 yen by 2008, from 10,000 yen now, if it wants to protect its 70 percent share of the Japanese plasma TV market from rivals Pioneer Corp. and Fujitsu Ltd., as well as from LCD makers.

Plasma display makers often stress that their screens offer better contrast than LCDs, because they do not use backlighting that is always illuminated, nor do they suffer from the motion blur, also known as smearing or ghosting, that is a problem with LCD TVs.

DIRE PROJECTION

Not to be outdone, the LCD camp offers its own technological advantages for large TVs.

LCDs are the only flat screens that can offer full high definition-quality images at sizes of 37, 42 and 50 inches. Plasma technology simply does not allow a detailed resolution of 1,080 x 1,920 pixels on a display of less than 60 inches, Berkoff said.

“They can never make the pixel size small enough to make a full high-definition 42-inch TV,” he said.

In addition, he said, new technologies will overcome LCDs’ notorious weaknesses of ghosting, weak contrast and poor picture quality when viewed at an angle.

He acknowledges, however, that even the latest LCD factories will not be able to produce LCD TVs that can compete with plasma in sizes of 50 inches or more, happily leaving that to plasma makers.

“How many homes want a 70-inch TV anyway?” he said.

In the horse race between the two display technologies for the next decade, there is one likely casualty: projection television.

Many market researchers, LCD makers and plasma producers dismiss it as a niche display technology.

They predict that projection TVs, while currently cheaper than thin displays, will be outpaced as electronics makers pour billions of dollars into developing and manufacturing LCDs and plasma panels with improved picture quality and lower cost.




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