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New consumer apps drive FPD market

Posted: 10 Oct 2006 ?? ?Print Version ?Bookmark and Share

Keywords:flat panel display? Frost & Sullivan Research? World Flat Panel Display Markets? LCD TV? PDP?

The flat panel display (FPD) market posted revenues of $65.25 billion in 2005, with figures forecasted to reach $125.32 billion in 2012, according to the latest analysis from Frost & Sullivan Research, World Flat Panel Display Markets.

Increasing demand for LCD TVs, mobile phones with full Internet access, electronic books and smart cards, along with hand-held consumer appliances have fueled revenue growth for the FPD market.

In 2006, the LCD TV segment alone expects a 90 percent growth rate in annual unit shipment. On the other hand, given its price advantage over LCD panels, the PDP segment is also poised for growth in certain large-screen TV categories.

To maximize revenues in FPD market, panel manufacturers are diversifying into price-sensitive consumer electronics market, apart from focusing on their traditional PC end-user segment.

"In making this shift to the consumer end-user applications markets, panel manufacturers need to decide judiciously on their product mix, which is a key determinant for safeguarding and optimizing returns on investment," said analyst KVJ Subrahmanyam of Frost & Sullivan Research.

Entering more lucrative segments and leveraging price advantages of volume production implies huge investment in higher generation fabrications, worth billions of dollars. To hedge such risks, many FPD manufactures are forging strategic partnerships.

"The recent merger of two major LCD companies, and the increased emphasis on partnerships for sharing capital investment costs, has meant that panel manufacturers can no longer operate in isolation," said Subrahmanyam. "They now need to concentrate on partnerships throughout the value chain."

The cyclical FPD market is challenged by frequent price cuts, competition from low-priced CRTs and continued capacity expansion plans of industry leaders. To counter these, panel manufacturers must focus on fine-tuning cost structures, innovation, diversified product-mix and growth opportunities in new end-user categories such as automotive, medical, consumer, aerospace and defense.

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