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iSuppli: Falling prices make profits elusive for LCD TV makers

Posted: 11 Nov 2005 ?? ?Print Version ?Bookmark and Share

Keywords:lcd? isuppli? lcd tv? tv? liquid crystal display?

Though sales of liquid crystal display (LCD)-based TV sets are likely to surge during the holiday season, falling prices will make it difficult for both LCD panel and TV set makers to grow their revenue, according to market search firm iSuppli Corp.

In particular, the firm warned that profitability could be elusive on black Friday, the day after Thanksgiving in the U.S. that is traditionally the biggest shopping day of the year.

"We're entering the hottest sales period of the year, with 40 percent of annual demand occurring in the fourth quarterand 50 percent of that fourth-quarter demand coming from black Friday on," said Joe Virginia, vice president of TFT-LCD marketing and business development for Samsung, during a keynote presentation at iSuppli's Flat Panel Information Display Conference in San Francisco earlier this week.

LCD-based TVs are rapidly displacing CRT-based sets, according to iSuppli vice president of consumer and display research Paul Semenza. He noted in a presentation that LCD TVs will account for 31 percent of all TV shipments by 2009, up from 5 percent in 2004.

But Semenza warned that strong unit shipment increases for LCD TVs, particularly in the 25 to 29-inch and 30 to 34-inch ranges, are being accompanied by steep price drops for those units, stalling revenue growth for suppliers.

The average price for square meter for a TFT-LCD panel is expected to decline to $2,149 in the fourth quarter, down from $3,642 the first quarter, according to iSuppli.

Semenza expects falling prices to slow down the overall growth of the flat-panel display industry the next few years, although new competitors may keep entering the market to take advantage of the availability of flat-panel technology.

iSuppli's findings could give LCD panel suppliers such as Samsung, LG.Philips LCD, AU Optronics Corp., and Sharp Corp. a cause for concern. All of them continue to invest hundreds of millions of dollars into next-generation fabs in a race to capture market share in LCD TVs, but at the same time need to amortize their huge investments.

- Spencer Chin

EE Times

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