The proliferation of large LCD panels into the former stronghold of PDP is upon us. The interesting thing is that this is not about the quality of panel technology since PDP still holds the edge in full motion video display performance, contrast ratio in dim lighting, and overall dynamic range and color space in a properly calibrated display. Nonetheless, DisplaySearch reports that large LCD displays are in fact taking the lead in the 40-inch class market for several reasons: "There are more LCD TV brands, or manufacturers, than for PDP TVs, which means more items on the selling floor, and a larger selling area. Now that Sony and Samsung Electronics, the two top TV brands worldwide, are pushing LCD TVs, the promotions (primarily in the US and other nations) are affecting the entire market."

Alan Brawn
Insight Media Consultant

DisplaySearch reports that in 2006 the shipments of 40" LCD panels to the US was over 8M panels and PDP were 9.8M panels but they forecast that for 2007, globally LCD will gain the lead with 16.9M LCD panels versus 13.7M for PDP. Some analysts disagree about the 2006 figures and claim that LCD is already in the lead. This shift in emphasis and shipment of panels presents a group of challenges for the manufacturers of PDP.

Until this point in time, PDP has essentially monopolized the 40/42"-inch segment of the flat panel displays. The 40/42"segment is the largest market for PDPs, and it looks as if this size niche will continue to dominate, but LCD panels seem likely to overtake PDP and supply the majority of the market starting at 30" and migrating through 40/42" panel configurations.

Matsushita Electric Industrial Co Ltd of Japan (Panasonic) has driven the PDP market and they have been joined over the last few years by divisions of Samsung, LG, and Pioneer/NEC. This informal "consortium" of PDP manufacturers has postulated in the past that panels of 37 inches or larger are PDP, and 32 inches or smaller are LCD. No longer is this necessarily the case.

For PDPs to maintain their dominance in flat panel displays in the 40/42" niche and larger sizes, the PDP manufacturers will have to maintain a shipment volume on a par with that of LCD panels in the 40/42" segment and then entice people to look at 50" and larger PDP sizes so that the aggregate total of their business remains profitable.

In a recent report, Matsushita Electric Industrial makes no bones about their understanding of the dynamics of the market and is proactively pursuing increased shipment volume and they have even invested in a new PDP fabrication plant No. 5 in Japan. Matsushita claims "Production capacity is to be 12 million TV sets (42-inch equivalent) annually, which is more than the 11.1 million sets of the other four fabs achieve combined." In talking to the people connected with the factory, they tell me Matsushita will "aggressively pursue cost reductions and increase the number of panels from a single substrate. The current state-of-the-art facility is the No. 4 Plant, which cuts eight [42-inch] panels and the new plant will cut 10." Matsushita believes that "the new facility will reduce fixed manufacturing cost per unit (42-inch HDTV-capable) to about 20% of their No.1 plant".

This begs the questions as to whether the major manufacturers like Matsushita can stave off the onslaught of the LCD competition. From my research, the answer is a firm maybe. In order to be as successful, there will have to be some "help" in the market from the other PDP manufacturers in terms of cost cutting and efficiencies and economies of scale to match the efforts of the LCD manufacturers. In some cases like Samsung and LG, they are speaking out of both sides of their mouths with their proverbial fingers in both camps. Companies like Pioneer are being cautious and although most would not admit it, they are taking a wait and see approach (this changed recent - see Pete Putman’s Display Daily from May 9th).

Market analysts tell us that we will continue to see a price decline in all flat panel displays throughout 2007 and this will affect the situation in the market and the battle for supremacy between PDP and LCD. Declining prices are one of the reasons that new technologies are not as forthcoming as we might have heard a couple of years ago. Look at all the buzz about SED technology only two years ago and the decline in flat panel prices among other reasons has certainly quieted that roar. We still hear a lot about OLED and the new Sony venture that is to bring out 11" TVs this year but they have not solved all their manufacturing and supply problems either and the decline in prices of flat panels displays will affect them as well. All we can say for certain is the market waits with bated breath to see the outcome. Matsushita for one will not go quietly into the night and the shot heard round the world during the holiday buying season of 2006 with Panasonic PDPs selling at just under $1,000 is just the beginning. Stay tuned and wide awake for more!