TFT panel supply expected to remain tight for months
By Robert Ristelhueber
EE Times
(12/08/99, 1:27 p.m. EDT)
CHONAN, South Korea — Supplies of TFT LCDs are likely to remain tight and prices high until the second half of next year, when new capacity will ease shortages, according to executives of Samsung Electronics, the leading supplier of the panels.
About 21 million TFT displays will be produced worldwide in 1999, falling a million units short of market demand, said Wan-Hoon Hong, senior manager of the LCD marketing group. The situation is sharply different from last year, when a glut of panels resulted in losses for the flat-panel industry.
Demand for TFTs is strong both from the notebook computer market, and from the computer monitor replacement market, he said. For example, a 12.1-inch TFT used in notebooks, priced at $280 in the first quarter of this year, is now selling for about $380. A 15-inch TFT aimed at monitor replacement has risen in price from $550 to $620 since the start of the year, according to Samsung.
Some in the industry had feared a return to overcapacity in 2000, when six TFT plants are expected to open in Taiwan, and new production lines are scheduled to be opened by Samsung, LG, and Sharp. But Hong said demand will rise to nearly 30 million units next year, slightly exceeding the expected output.
Waiting for better yields
New factories usually experience low yields, taking about a year to reach acceptable yields of over 80 percent. Still, the new Taiwanese plants are expected to produce about 5 million units in 2000, said Sang-Wan Lee, executive vice president and general manager of the AMLCD Division.
TFTs are rapidly displacing older LCD technologies, said Hong. Last year, TFTs made up 77 percent of the LCD market, but that figure hit 91 percent this year, and will climb to 96 percent next year, he estimated.
The trend toward larger panels is also continuing. For notebooks, 14.1-inch displays are now mainstream, with 15-inch screens growing fast, Hong said. In desktop monitors, 15-inch TFTs are the dominant form factor, but 17-inch displays are expected to become the most popular next year. Samsung, with about a 25 percent market share, has been pushing the adoption of larger panels, which are more profitable, said Jun Souk, vice president for LCD research and development.
Even bigger displays are in the works. Samsung expects to begin mass production of a 24-inch display next April, aimed at markets including financial traders, desktop publishing, and HDTV. Later next year, a 30-inch TFT is expected from the company, and a 42-inch display is scheduled for release in 2001, aimed at the HDTV market with 1365 x 968 resolution, and a 16:9 aspect ratio.
While three-quarters of Samsung's TFTs are today sold for notebooks, with the rest going for monitor replacement, that mix will soon change dramatically, Hong said. By 2005, monitor replacement will consume 43 percent of units, while notebooks will take 29 percent. Digital TV sets will use 11 percent of output, and portable devices such as smart phones and PDAs are expected to consume 17 percent, he said.
The company is taking a cautious approach toward field-effect displays (FED), with research being done at the Samsung Advanced Institute of Technology but no production planned. "There's a limit to how much you can expand the size with FED," said Souk, with only a niche market for 5-inch displays currently existing.
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