Barriers eroding to LCD TV adoption By Mike Clendenin , EE Times June 25, 2004 (10:41 AM EDT) URL: http://www.eet.com/article/showArticle.jhtml?articleId=3D22102056 Taipei, Taiwan - Flat-panel TVs aren't cheap, and they can lag the performance of mainstream televisions. But those barriers to adoption could be dismantled over the next few years. Competition among panel makers in Taiwan and South Korea is heating up, which should bring prices down, and merchant market silicon is replacing the customized chips used by Japanese suppliers, enabling more players to enter the market. They include Dell, Hewlett-Packard, Gateway and such Taiwanese companies as Acer, BenQ, Sampo, Teco and Tatung. More LCD panel capacity will be added this year than in the past three years combined. And since panels are about 80 percent of the bill of materials of the TVs, it's easy to telescope the effect of abundant supply. By 2008, a panel for a 30-inch/32-inch LCD TV will cost less than half of what it costs today, sliding from $953 to $430, according to industry watcher DisplaySearch. From 2003 to 2008, LCD TVs will go from being the smallest segment of the flat-panel market to the largest, growing at a compound annual rate of 68 percent, from $2.3 billion to $25.7 billion. But price is everything - and at present the price of flat-screen TVs isn't right, said Ross Young, president of DisplaySearch. "The model of 30-inch LCD TVs priced similar to 42-inch plasma TVs is not working in the United States," he said. Throughout the supply chain, margins are still pretty good - maybe too good. The average margin for panel makers was 28 percent in the first quarter. Chip makers enjoyed 30 percent to 40 percent. Even assemblers saw 10 percent to 15 percent, said Ben Lee, an analyst for Nomura Securities (Taipei). "We have only seen the first wave of TV outsourcing by brand-name TV vendors, so Taiwan doesn't have to sacrifice margins yet," Lee said. "But next year will be a different matter." That could open the door to local chip makers, like Sunplus Technology Co. Ltd., that cut their teeth on the low-end LCD monitor market, provided they vault the performance barrier. Meanwhile, vendors like Genesis, Philips and Pixelworks are increasing integration. Pixelworks Inc. wove its DNX 3-D combo filter technology into a video decoder to enable operation in both the U.S. and Europe. Other functions folded into the part eliminate a handful of discretes. Such improvements make it feasible for IT companies like BenQ Corp. to get into the TV business. "I think the standard parts are already as good as the [custom] chips used by the Japanese," said Peter Chen, vice president and general manager of BenQ's Digital Media Business Group. Copyright 2003 CMP Media ---------------------------------------------------------------------- You can UNSUBSCRIBE from the OpenDTV list in two ways: - Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word unsubscribe in the subject line.