The 40" class flat-panel TV market has been dominated by plasma
for quite some time now. The tide, however, is starting to change and LCD
TVs are starting to encroach into traditional plasma territory.
With plasma manufacturers finding it difficult to incorporate
full 1080p HD resolutions into their sub-50" TVs, LCD TV manufacturers
with higher resolution displays have found an opening to exploit. Pricing in
this sector of the market still plays in favor or plasma displays, but the price
differential is declining quickly according to Credit Suisse analyst Wanli
Wang. "This Christmas season probably is the last chance for (plasma TV
makers) to promote 42-inch models. By this time next year probably there will
be no price difference between plasma and LCD TVs."
Overall, the LCD TV market is still larger than the plasma
TV market with demand expected to reach $75 billion USD in 2008 and $93 billion
USD in 2010. The plasma TV market is expected to reach $24
billion USD in 2008 and then enter a decline in 2009. Even more telling is that
80% of R&D funding for flat-panel televisions is devoted to LCD technology
with plasma and other display technologies vying for the remaining 20%
according to Wang.
As the market for plasma TVs declines, manufacturers who are
producing both LCD and plasma TVs are expected to bail on plasma altogether and
focus solely on LCD manufacturing. Companies like Sony and Chunghwa
Picture Tubes (CPT) have already turned their sole attention towards LCD
technology. "We cannot focus on two different products because of heavy
capex (capital expenditure). That's why we had to choose one," said CPT
CFO James Wu.
With plasma seeing increased competition in the 40” class,
the technology may find safer waters in the 50” and higher class where it
enjoys production and image quality advantages over LCD technology. But with so
much money being poured into LCD TV development, the advantages aren’t likely to
last long – in fact, Samsung is already showing its LCD manufacturing prowess
with a 70” 1080p LCD TV
which is due to enter production next year.