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Makers of large LCD and Plasma panels — except for Samsung and possibly LG — are losing money.  In the case of the Japanese panel makers, it’s a staggering amount of money.  When analysts email back and forth at night after three or more glasses of wine (as some of us do), the discussion sometimes turns to which of the leading makers of plasma display panels (PDPs) will drop out of the game first.  But before we go further, let’s pause for some background.

Although plasma remains a TV-panel technology with superb image-quality characteristics, its lifetime as a significant player in consumer television is severely limited.  Its market share is now in the mid-single digits and falling.  Why that is true has a lot to do with the fact that PDP does not have the high-brightness wallop that LCD does when shown on a highly illuminated retail floor.  It will look better than LCD in your discreetly lit living room, but that is a comparison that most consumers never get to make.  Plasma fans may fuss and fume, but this is pure Darwinian selection.  The organism only needs to survive long enough to reproduce — or, in this case, be sold and not returned.  After that, it doesn’t matter.

So, who will drop PDP first?  My guess has been LG, but I may be wrong.  On December 18, Adam Westlake stated in The Japan Daily Press that Panasonic “is said to be considering whether or not it will abandon its production of plasma TV displays by March 2013. As the company struggles with huge losses this fiscal year and is rapidly shedding unprofitable businesses, a source with the company says Panasonic will instead focus on organic electroluminescence and other display panel technologies for TVs in the future. …The company is said to continue producing plasma panel production for industrial-use displays for the time being. Among its goals for recovery are to focus on profitable businesses like screens for tablet devices and the development of solar panels.” Well, no surprise on that last part.  Everybody has figured out that high-resolution panels for tablets are profitable — at least for now

Okay. If you believe that the dominant PDP player is going to be the first to throw in the towel in favor of OLED, what are the dominant developers of TV-sized OLEDs going to do?  According to DisplaySearch’s David Hsieh, Samsung and LG have realized that large OLED really is a tough nut to crack, and they are now going to make 4Kx2K (or Ultra HD) their first priorities. Not surprisingly, part of the OLED problem is manufacturing yield. Total yield, even after repairs, is less than 30%, said Hsieh, and glass frit encapsulation (which works well on small OLED displays) is causing reduced lifetime in large panels.

Following the IFA show in Berlin September the Black Friday marketing hysteria in the U.S. in November, “Korean panel makers lost some confidence in OLED,” said Hsieh, and the manufacturers “began to feel that they could not justify a further investment in capacity expansion.”,

The revised plans call for 4Kx2K LCD-TV to move into volume production in 2013, with 4Kx2K OLED-TV to be only demonstrated in the same year.  This new plan also calls for 4Kx2K OLED-TV to move into volume production in 2014, said Hsieh

All that is wrong with these revised priorities is the astronomical pricing on the initial 4Kx2K 84-inch TVs that are being offered by Sony and LG this holiday season.  However,Taiwanese and mainland Chinese brands will be showing smaller 4Kx2K sets at CES this January.  Let’s see how far and how fast they are able to push down the pricing.

Ken Werner is Principal of Nutmeg Consultants, specializing in the display industry, display manufacturing, display technology, and display applications. You can reach him at kwerner@nutmegconsultants.com.

Posted by Pete Putman, December 20, 2012 3:53 PM

About Pete Putman

Peter Putman is the president of ROAM Consulting L.L.C. His company provides training, marketing communications, and product testing/development services to manufacturers, dealers, and end-users of displays, display interfaces, and related products.

Pete edits and publishes HDTVexpert.com, a Web blog focused on digital TV, HDTV, and display technologies. He is also a columnist for Pro AV magazine, the leading trade publication for commercial AV systems integrators.