Plasma display panel (PDP) technology makers are pinning high hopes on the emerging but uncertain 3D TV market to claw back market share after falling behind popular LCD flat screen backers.
LCD or liquid crystal display has led the replacement of cathode-ray tube (CRT) television, as its technological edge over PDP in producing smaller sizes helped it attract consumers trading in their bulky and boxy CRT sets. “PDP won't be able to challenge LCD as a mainstream flat panel technology as LCD also continues to evolve into better one,” said Will Cho, an analyst at Daewoo Securities. “Having said that, it still does have strength over LCD, especially in 3D market. So the stronger 3D market grows, the better PDP technology will be able to recover,” he said.
PDP has been a choice of technology in large sized panels over 40 inches, although LCDs are rapidly expanding into the market with free-falling prices. Prices of 42-inch LCD panel dropped around 40 percent over the past two years, which were moderated by severe glass shortages last year, according to industry data. LCDs account for around 70 percent of global TV market of around 210 million units in 2009, with CRT less than a quarter and PDP with only 7 percent, according to DisplaySearch. PDP makers are making a last-ditch effort on 3D TVs, which usually come in big size screens where PDP scores on pricing and boasts wider viewing angle and quicker response time.
Global TV makers including Samsung, LG Electronics and Panasonic Corp produce both LCD and PDP sets and if PDP takes off, then Panasonic, which is making the strongest push for plasma technology, might emerge as the biggest winner. “We believe plasma TVs are the best device to offer 3D images thanks to its high response speeds…and all this attention on 3D TVs is a strong tailwind for our plasma business,” said Toshihiko Shibuya, a spokesman for Panasonic, the world's top PDP set maker. A 42 inch LCD panel costs around $340, while the same-sized PDP panel is 40 percent cheaper at around $200, according to analysts at Citigroup. PDP has also evolved into better display to overcome major weaknesses and its design has also got slimmer. Demand for 3D TVs will likely grow more than tenfold to 27.4 million units in 2013 from an estimated 2.5 million units this year, according to DisplaySearch. The research firm expects the ratio of plasma TVs to LCD models in the 3D TV market to come to one to three in 2013, indicating relatively strong standing of plasma TVs in the 3D arena. In the same year, LCD TVs are expected to outsell plasma models 15 to one in the overall flat TV market.
“PDP is still more popular in large-sized markets of over 50 inches and it is viewed as more competitive technology in 3D TV markets where delivering vivid images is critical, which is one of PDP's strengths,” said Jason Kim, a spokesman for Samsung Electronics, the world's top TV brand. “We've also improved major shortcomings of PDP. Power consumption of our PDP models, for example, dropped by half last year and we plan to cut another 40 percent this year.” For graphics on global TV market and flat panel prices
Most PDP makers are increasing production but cautious in expanding capacity as sales growth is set to lag overall market expansion. The technology will also be mainly targeting niche markets such as 3D TVs before eventually replaced by new technologies such as organic light-emitting diode. Analysts said Panasonic may start running its PDP lines at full capacity from September as supply of 3D TV panels increases. But LG Electronics suspended one of its PDP production lines in 2007 and converted it into solar cell production line to restructure its less profitable PDP business. “It's a technology that will disappear some day…and its growth rate is not explosive, which is why we don't plan more investment into the technology,” said Lee Kwan-sup, vice president of LG's Home Entertainment Marketing strategy. “But it is selling well, just as there is still demand for CRT sets, mainly from emerging markets. So we are running production at maximum capacity.” Analysts say rapidly falling prices and weak demand mean many PDP makers will struggle to make money. “It's really difficult for PDP sets to make profits because prices keep falling and demand remains weak,” said Cho at Daewoo. And the dominant LCD technology is also getting smarter by adopting LED technology, which is thinner and has longer lifespan and lower power consumption than traditional LCD sets using CCFL (cold cathode fluorescent lamp) technology. DisplaySearch forecast plasma TV unit shipments to rise about 6 percent this year to just over 15 million units, after falling 2 percent in 2009. That will be dwarfed by more than 180 million unit sales of LCD sets, a 24 percent jump from a year ago, against the global TV market estimated at 228 million units.
Publish date: April 19, 2010 2:03 pm| Modified date: December 18, 2013 6:14 pm