LCD-TV makers face tough times or revenue growth

Paul Boughton

However, despite surging sales, rapidly-declining prices mean that revenue growth and profitability may be difficult to achieve for LCD-TV maker.
According to industry parlance, Black Friday is the day after the Thanksgiving holiday in the United States, a date when a flood of Christmas sales allows consumer electronics makers and retailers to achieve profitability for the first time during the year, ie to go into the black. For television and LCD panel makers, Black Friday is the key date that determines the success of the holiday season-and of the entire year.
“We’re entering the hottest sales period of the year, with 40percent of annual demand occurring in the fourth quarter-and 50percent of that
fourth-quarter demand coming from black Friday on,” said Joe Virginia,
vice president, TFT-LCD marketing and business development for Samsung Semiconductor.
Much of the growth in television shipments in 2005 will be driven by LCD sets, according to iSuppli. Global television shipments will increase to 176.1million units in 2005, up 5.8percent from 166.4million in
2004. LCD-TV shipments will rise to 17.1million units in 2009, up 93.7percent from 8.9million in 2004.
With production of larger-screen LCD-TV panels growing at a rapid pace, and prices declining with similar alacrity, these flat-panel sets are eating into market share traditionally occupied by CRT products.
“In the television market, LCDs are rapidly displacing CRTs across the screen-size spectrum,” noted Paul Semenza, vice president, consumer and display research for iSuppli, during his opening address at FID. Improving efficiency in TFT-LCD panel production, combined with increasing competition, is causing the cost of TFT-LCD panel production to fall on a square-meter basis, leading to lower prices for television sets.
The average price per square metre for a TFT-LCD panel was expected to decline to US$2149 in the fourth quarter of 2005, down from US$3642 in the first quarter of 2006, according to iSuppli.
While the decline in pricing is a boon for consumers, it is leading to some tough market conditions for LCD panel suppliers and television makers
The long-term impact of this phenomenon is that overall growth for the entire flat-panel industry will slow in the coming years.

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