... LCOS technology is simple in principle and potentially superior to existing options. Demonstrations of LCOS technology certainly are very impressive. However, ... it is very difficult to implement in practice.
... LCOS is a wonderful technology that allows both high-pixel count and high brightness. Potentially, manufacturing could be simple and low-cost.
iSuppli: DELAY IN DISPLAY CHIP REFLECTS THE TECHNOLOGY - NOT PROBLEMS AT INTEL
By Kimberly Allen, iSuppli/Stanford Resources [Friday 20 August 2004]
Intel Corp.’s announcement that it will delay the introduction of its planned Liquid Crystal on Silicon (LCOS) product spurred much speculation that the company is stumbling in its execution. However, Intel’s delay reflects the on-again, off-again nature of the LCOS market as a whole, rather than revealing fundamental problems at the chip giant, iSuppli/Stanford Resources believes.
Intel this week said it will not release its LCOS chip by the second half of 2004, as it had announced earlier. The chip, codenamed Cayley, was expected to be on the market in time to be used in television sets sold during the all-important holiday season. Intel did not divulge when the chip is now expected to be released.
The move to delay Cayley conforms to a long-term pattern of cyclic investment and interest in LCOS technology that far predates Intel’s entry into the market. The reasons for the market’s cyclical nature are intrinsically tied to three traits of the technology.
The first trait is that LCOS technology is simple in principle and potentially superior to existing options. Demonstrations of LCOS technology certainly are very impressive.
However, the second trait of LCOS is that it is very difficult to implement in practice. The final trait of the technology is that it is competing in a crowded marketplace.
The first two traits mean that LCOS has spurred the interest of many companies, from display giants to tiny start-ups. Even Intel, the world’s number-one chip supplier, had its curiosity piqued by the appeal of a silicon-based liquid crystal display. However, challenges in terms of manufacturing, supply-chain dynamics, and competition mean that few companies are destined to succeed in the LCOS business.
Because of this, a wave of LCOS excitement builds and crests every few years. Some readers may remember the promise of “projection monitors” using LCOS technology in the late 1990s. The players supporting this concept had largely backed off by the turn of the century.
The next LCOS wave built up around 2001, coinciding with the beginning of the serious interest in digital television. But again, a spate of products entered and then exited the market.
Intel’s initial excitement and subsequent pulling back during 2004 is simply repetition of the same pattern.
Exceptions exist, of course. Philips stuck with its LCOS vision through the slump of 2003, continuing to develop and market its single-chip television, although the product name was changed and several shipments were delayed. A number of small players slowly but surely have been gaining market share, mainly in Taiwan. Furthermore, JVC, one of the original companies to commercialize LCOS in the 1990s, has persisted in offering high-end products through all the cycles.
But for the most part, it is clear that LCOS interest comes in waves, and Intel is surfing those swells along with the rest of the industry.
Another misconception in the general reporting of Intel’s move has been to link it with other product delays or challenges in Intel’s execution, thus creating a titillating picture of the chip giant beginning to stumble. A bit of perspective reveals that Intel’s LCOS effort is a tiny part of the company’s enormous microprocessor business. This is not to say that Intel is not facing challenges in its mainline efforts, but such issues are separate from the altered LCOS strategy.
Where does this leave LCOS? In much the same position as always.
LCOS is a wonderful technology that allows both high-pixel count and high brightness. Potentially, manufacturing could be simple and low-cost.
However, uniting the chip—or chips—with the other engine components into a standard configuration remains enormously difficult. And the market space with the largest potential—television—is already crowded with multiple technologies, including other projection types. LCOS offers high potential, but also high risk.
One final comment on the LCOS cycle: Each iteration does not return the technology to square one; improvement and market advancement occur. Perhaps in a future cycle enough momentum will have been built to carry LCOS into continuous forward motion. But time is running short as competing technologies also improve.
Kimberly Allen, Ph.D. is director of technology and strategic research for iSuppli/Stanford Resources.
Editor’s Note: On Display is a new section in iSuppli Market Watch that discusses developments in the display industry and how they relate to conference tracks at the iSuppli/Stanford Resources Flat Information Displays (FID) 2004 event in San Francisco in November. iSuppli/Stanford Resources will spin this section off into a new publication, also called On Display, starting in September. The issue of emerging displays, including 3D types, will be discussed at the FID event.
For more information on FID 2004, please visit: isuppli.com
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