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  • CRTs to be Supplanted by LCD Monitors in 2000
  • November 2, 1998 (TOKYO) -- Liquid crystal displays (LCDs) are expected to replace cathode ray tubes (CRTs) in the near future, a Nikkei Byte study says.
    From the second half of 1998, many 14-in. thin-film transistor (TFT)-LCD monitors priced at less than 100,000 yen (US$840) have been put on sale. Melco Inc. and Iiyama Electric Co., Ltd. began selling such products, and Mitsubishi Electric Corp. followed suit in September.

    The prevailing price of a 14-in. LCD monitor dropped nearly 50 percent in a year. The 14-in. LCD monitor is equivalent to a 17-in. CRT.

    Nikkei Byte expects that the price of 14-in. to 15-in. LCD monitors will drop to 60,000 yen to 80,000 yen in 2000. At that time, no substantial price gap will exist, if additional merits of LCD monitors, including a small footprint, are taken into consideration. CRTs may then give way to LCD monitors.

    Super-twisted nematic (STN)-LCDs are much more economical than TFT-LCDs. However, only TFT-LCDs will be considered in this report, because they hold promise as a candidate to follow CRTs, from the perspective of image quality.

    The terms "LCD panel" and "LCD monitor" will be employed separately in this report. The former is defined as a component to be installed in notebook personal computers or LCD monitors. Monitor makers procure LCD panels from producers of LCD panels and they make LCD monitors.

    Oversupply and Corporate Business Strategies Caused Sharp Fall in Prices

    The main reason for the price declines is the glut in LCD panel supply. In the third quarter of 1997, many LCD panel makers started operating production lines, called the "third" or "third-and-half" lines, under the prospects that the market for notebook PCs would expand sharply in that year. But the market did not expand as expected, inventories of LCD panels rose and prices fell. The price of a 14-in. TFT-LCD panel dropped from 100,000 yen to 60,000 yen or even lower.

    Cost-cutting efforts by LCD monitor makers also contributed to the fall in prices. Iiyama Electric Co., Ltd. began selling in November 1997 a 14-in. LCD monitor at a price of 188,000 yen (US$1,570). It had previously been priced at 220,000 yen to 260,000 yen. The company lowered the price three times in 1998, and reduced it to 98,000 yen (US$820) in June.

    The company's business strategy is to impress customers that "Iiyama is the company of LCD monitors."

    And that strategy added fuel to the price declines, dragging other monitor makers into intense competition, said Yukiko Ogihara of the screen and storage sales promotion division of NEC Home Electronics Ltd.

    Next Major Price Decline Will Come in 2000

    The current price decline will bottom out by the first half of 1999. Many notebook PCs, which were marketed in the summer of 1998, used 14.1-in. panels. Each large glass substrate can yield only half the number of 14.1-in. panels as compared to the number of 12.1-in. panels, which had been the mainstream LCD panel. That means that the same production line offers only half the output capacity in terms of units.

    Sales of notebook PCs are brisk in 1998 and the glut in panel supply has ended. Panel makers have drastically reduced plant investments for 1998-1999, and thus another round of oversupply is unlikely to be seen until around 2000.

    Nikkei Byte expects that the next tide of falling prices will occur in 2000, in part because new entrants will emerge from Taiwan around the second half of 1999. (See chart.). More than six companies are expected to enter the market. These makers have tied up with oversees producers such as Mitsubishi Electric Corp. and IBM Japan Ltd.

    Mitsubishi procures LCD panels from Chunghwa Picture Tube Ltd., a partner in Taiwan, company officials said. The price of a 15-in. panel will be about 50,000 yen (US$420).

    Also, other Taiwan-based makers will start shipping the products at relatively low prices, which will force panel makers in Japan and Korea to follow suit.

    Panels with High Image Quality to be Developed

    High quality images and user-friendly features are needed to boost the popularity of LCD monitors.

    Twisted nematic (TN) types, the most prevalent type of LCD panels in the world, have a major shortcoming in that they offer narrow viewing angles and easy color solarization. For large-sized panels like monitors, a special optical compensation film must be overlaid on the LCD glass substrates.

    The in plane switching (IPS) type and the vertical alignment (VA) type, which use multi-domain technology, can solve that problem, at least in theory. Many LCD monitor makers are interested in both types because the viewing angles are wider than those offered by the TN type.

    Logitec Corp., a peripheral device maker, decided to use Fujitsu's VA type panels in July 1998. IBM Japan and Sony Corp. adopted Hitachi's IPS type panels in September. Iiyama and NEC Home Electronics are marketing LCD monitors with an IPS type panel. Matsushita Electric Industrial Co., Ltd. also is studying ways to commercialize such products.

    IPS and VA type panels are US$50-US$60 more expensive than the TN type, because of the poor yields during production and higher costs of materials.

    Hitachi started producing IPS type panels on a commercial basis in 1996 for the first time. Other panel makers, including NEC and Matsushita, are producing the products. But, the yields are still lower than those of TN type panels. Hitachi said the solutions to improve the yields have been found. IPS type panels attract attention because, unlike VA type panels, they do not need the special film that costs on average of US$50 per panel.

    Fujitsu and Merck AG of Germany jointly developed VA technology in 1996. Although VA type panels need the optical compensation film, it is economical because the film costs less than US$10 a panel. The main problem in terms of market price is that Fujitsu is the sole manufacturer of such panels.

    IPS type panels offer a slow response speed and easy color solarization at specific viewing angles. But improvements in the viewing angle characteristics are progressing. In particular, the problem of viewing angles will be improved using the multi-domain technology.

    Also, an improvement of the image quality of VA type panels is proceeding through reviewing liquid crystal materials and using the multi-domain technology.

    Cost Reduction Efforts for Peripheral Devices are Needed

    The image quality of an LCD monitor depends in part on its signal processing circuits, which cost 10,000 yen-20,000 yen. To reduce the total cost, it is worthwhile to review the signal processing circuits outside a LCD panel.

    Melco's 14-in. monitor eliminates such functions as smoothing and color number compensation to set its price less than 100,000 yen.

    Mitsubishi's 14-in. panel, also sold at a price less than 100,000 yen, had its price slashed by integrating various functions into a microchip, while improving such functions as automatic screen adjustment and smoothing.

    The price of an LCD monitor with a digital interface can be cut by more than 10,000 yen, although, in this case, such processes as smoothing must be done in the PC.

    Intel Corp. and other companies announced in September 1998 that they will support digital interfaces for LCD monitors. If the digital interface is widely disseminated, 14-in. LCD monitors can be priced at less than 50,000 yen as early as 2000.

    Chart: Production and price forecasts of LCD panels -- on a 14/15-in. LCD panel basis
    "Special report LCD industry 97"(reported by ED Research); edited, compiled by Nikkei Byte.

    (return to news)

    Related stories:
    Shortage of LCD Panels Projected for 1999: Dresdner Kleinwort
    Competition Pushes Prices of TFT-LCD Monitors Down Further

    (Takayuki Saito, Staff editor, Nikkei Byte)

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    Updated: Mon Nov 2 20:51:16 1998 PDT