Electronics Production | August 10, 2007
Panel Revenue to Peak in 2008
Facing intense competition from Liquid Crystal Displays (LCDs) in the consumer and business markets, Plasma Display Panel (PDP) manufacturers are finding it increasingly difficult to keep pace, according to iSuppli Corp.
Yet despite this competition, falling Average Selling Prices (ASPs) are enabling PDPs to enjoy a growth phase in the consumer and business market. However, this period of growth will be short lived, with those same ASP declines causing market revenue to begin to decline starting in 2009, following a peak in 2008. Declines in PDP ASPs are being driven by a number of factors, including: •Increased competition that is forcing panel makers to reduce prices—even amid the tight supply situation seen in the first quarter. •Larger PDP fab sizes that are boosting production efficiencies. •Improved manufacturing processes. •Declining costs for display materials. •Escalating competition from LCD and microdisplay-based rear-projection technologies. Global PDP revenue will rise to $8.6 billion in 2007, up 11.8 percent from $7.7 billion in 2006. Revenue will rise again in 2008, swelling to $10.2 billion, up 18.5 percent from 2007 because of increased production of 50-inch and larger sizes. Due to increased competition and continuous price pressure, the market will then undergo a revenue contraction, declining to $8.7 billion by 2011. The market appears more attractive from a unit perspective, with shipments reaching 23.6 million units by 2011, rising at a Compound Annual Growth Rate (CAGR) of 18.6 percent from 10 million in 2006. iSuppli's worldwide forecast for unit shipments and revenue for PDPs for the period of 2006 through 2011. See the figure below. Korean companies gain market share While Matsushita maintained its leadership position in panel production in the first quarter, the two major Korean suppliers—LG Electronics and Samsung SDI—increased their market share, rebounding from losses in the fourth quarter of 2006. Matsushita in the first quarter commanded a 31.5 percent market share in the PDP market with LG Electronics in the No. 2 position with 24.7 percent of shipments and Samsung SDI in the third slot with a 22.9 percent share. iSuppli's market share estimate for the Top-5 plasma panel suppliers in the first quarter of 2007, ranked by unit shipments. However, while the Korean companies are gaining, Matsushita is the only panel maker seeking to expand its existing capacity. In contrast, the other companies are taking a wait-and-see approach as to how PDP-TV sales will react to the onslaught of LCD-TVs. “The PDP market encountered tightness in supply in the first quarter due to factors including panel makers scaling back production," said Riddhi Patel, principal analyst for television systems at iSuppli. “Because of this, most panel makers have cut their production utilization rates to around 70 percent—except for Matsushita, which remains at 100 percent. In order for plasma manufacturers to continue to be successful in the market, they must weather the storm of LCDs while focusing consumer interest on PDPs' attractive form factors and reasonable prices."