[opendtv] Barriers eroding to LCD TV adoption

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "OpenDTV (E-mail)" <opendtv@xxxxxxxxxxxxx>
  • Date: Wed, 30 Jun 2004 16:07:47 -0400

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

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

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

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
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