lcd cost break-down 2006 by displaysearch

DisplaySearch All Rights Preserved. Reproduction & Distribution Prohibited Without DisplaySearch Permission 1

DisplaySearch 2006 TFT LCD and Component Market Trend

2006/5/52006年平面顯示器材料與元件發展現況與趨勢研討會

DisplaySearch Taiwan David Hsieh 謝勤益

[email protected]

11

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Please Come! 2006 Taiwan FPD International Conference

DisplaySearch

It’s a Flat World After All!

May 25-26, 2006Taipei International Convention Center

台北國際會議中心

www.displaysearch.com.tw


Why Is LCD Component So Important? Why Is LCD Component So Important?

-- LCD BOM Cost Represent a key portion of LCD total Cost LCD BOM Cost Represent a key portion of LCD total Cost

-- Market Concentration For Many Key Components is High Market Concentration For Many Key Components is High

-- TFT LCD Technology = Equipment Technology +TFT LCD Technology = Equipment Technology +

Component TechnologComponent Technology y

-- TFT LCD Smile Curve Shows Component Makers areTFT LCD Smile Curve Shows Component Makers are

winning the most money. winning the most money.


LCD BOM Cost Represent a key portion

70%

17” MNT Panel total cost break down (Gen5) 32” LCD TV Panel total break down (Gen6)

79%

• BOM cost will take major portion on total cost when panel size become bigger.

Source: DisplaySearch Quarterly TFT LCD Cost Report

DisplaySearch All Rights Preserved. Reproduction & Distribution Prohibited Without DisplaySearch Permission

Color Resist• JSR (40%)

Color Filter• Toppan • DNP• In house…..

Glass• Corning (>50%)• Asahi• NHT• NEG

Driver IC• NEC• Novatek• TI• Toshiba• Himax• Matsushita• Samsung

CCFL• Harison (16%)• Matsushita • Sanken• NEC• Wellypower

Polarizer• Nitto Denko( ~35%)• Optimax• Sumitomo• LG Chem.

TAC• Fujifilm (80%)

Panel MakersTop 5 : 72%Highest : 21%

ODM/OEM• Quanta• Compal• Wistron• ASUS• Unwill• FIC• Arima• ECS• Clevo• Mitac• LG Electronics

Brand• Dell (17%)• HP• Acer• Toshiba• Lenovo• Fujitsu-Siemens• SONY• NEC• ASUS• Apple• Gateway

ODM/OEM• AOC • BenQ• Foxconn• Lite-On• Philips• Coretronics• Compal• Delta• Proview• Samsung• LG Electronics

Brand• Dell (17%)• Samsung• HP• Acer• LGE• Philips• BenQ• Viewsonic• Lenovo• SONY• NEC DS

ODM/OEM• BenQ• TECO• Sampo• Tatung• Lite-On• AOC• Compal• Visionbank• Philips• Coretronics• Albatron

Brand• Sharp (17%)• Philips• Samsung• SONY• LG Electronics• Panasonic• Toshiba• JVC• Sanyo• TTE• Syntax

Notebook PC Top 10 : >80%) LCD Monitor (Top 10 : 67%) LCD TV (Top 10 : >70%)

Market Concentration For Many Key Components is High BEF• 3M(>90%)• E-fun• Reflexite


TFT LCD Technology

Year: 2000Gen3.5-Gen4

Year: 2004-2005

Gen5- Gen6

Year: 2006Gen7

Equipment Technology Component Technology

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

12"NB $21 $18 $16

15.4"NB $25 $23 $20

17"MNT $26 $22 $19

19"MNT $41 $34 $29

26"TV $123 $100 $75

32"TV $219 $135 $101

40"TV $411 $284 $240

Q4'04 Q4'05 Q4'06

Backlight Price

Source: DisplaySearch Quarterly Backlight Report


Who is Making Profit In The Supply Chain

Integration

Mar

gin

Chemicals RetailPower

FPDMakers

BrandPower

Mat’ls &Tools

Integration

Mar

gin

ProprietaryChemicals

Special Retail

FPDMakers

Hi-EndBrandPower

SpecialityMat’ls &

Tools

Integration

Mar

gin Chemicals

Films

RetailPower

FPDMakers

BrandPower

Mat’ls &Tools

Past Now

Mainstream

Mainstream

Niche

Source: DisplaySearch Display Economics Report


Agenda For Today Agenda For Today

2006 2006 TFT LCD TFT LCD Market Outlook Market Outlook TFT LCD TFT LCD Supply Chain & Supply Chain & TFT LCD Cost StructureTFT LCD Cost StructureKey component Key component Market Market TrendTrend-- GlassGlass-- Color Filter Color Filter -- Polarizer Polarizer -- TAC TAC -- Backlight & CCFLBacklight & CCFL-- Driver ICDriver ICWrapWrap--Up Up



2006 T2006 TFT LCD FT LCD Market OutlookMarket OutlookTFT LCD TFT LCD Supply Chain & Supply Chain & TFT LCD Cost StructureTFT LCD Cost StructureKey component Key component Market Market TrendTrend-- GlassGlass-- Color Filter Color Filter -- Polarizer Polarizer -- TAC TAC -- Backlight & CCFLBacklight & CCFL-- Driver ICDriver ICWrapWrap--Up Up


TFT LCD Area and Average Size Growth

0

10

20

30

40

50

60

70

80

Mill

ions

of m

2

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Gro

wth

TFT Panel Area 12.6 23.1 32.9 42.8 53.1 63.7 73.8

Growth 51% 82% 43% 30% 24% 20% 16%

2004 2005 2006 2007 2008 2009 2010

10

15

20

25

30

35

Avg.

Pan

el D

iago

nal

LCD Monitors 16.8 17.3 17.8 18.1 18.3 18.7 19.0

LCD TVs 21.6 25.8 27.9 29.2 30.5 31.7 32.8

Notebook PCs 14.5 14.6 14.8 14.8 14.9 14.9 14.9

2004 2005 2006 2007 2008 2009 2010

Panel shipment area growth was an astonishing 82% in 2005 led by LCD TV modules rising from 22” to 26”. Area growth will slow as unit volume slows in monitors, but will remain impressive.Panel shipment area growth will be 43% from 2005-2006.

Source: DisplaySearch Worldwide Forecast Report


After The Merge Of AUO & QDI

Worldwide TFT LCD Capacity Share (Before AUO & QDI Merge)Area Base

2005 2006 2007 2008Samsung 18.6% 19.4% 18.8% 19.0%LPL 19.1% 19.3% 18.3% 18.6%AUO 12.7% 13.2% 13.9% 13.6%CMO 10.6% 12.1% 14.5% 15.6%Sharp 8.1% 6.5% 7.7% 8.4%CPT 5.7% 6.6% 5.9% 5.5%QDI 4.0% 4.6% 4.6% 4.4%HannStar 5.1% 4.3% 3.3% 2.7%Others 16.1% 14.0% 13.0% 12.2%

Source: DisplaySearch Quarterly Supply Demand Report

Worldwide TFT LCD Capacity Share (After AUO & QDI Merge)Area Base

2005 2006 2007 2008Samsung 19.4% 18.8% 19.0%LPL 19.3% 18.3% 18.6%AUO+QDI 17.8% 18.5% 18.0%CMO 12.1% 14.5% 15.6%Sharp 6.5% 7.7% 8.4%CPT 6.6% 5.9% 5.5%HannStar 4.3% 3.3% 2.7%Others 14.0% 13.0% 12.2%

Component Makers Are Facing two market –60% v.s. 40% (Blue Sea & Red Sea? )


L/A TFT LCD Demand Supply Forecast

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Seasonal Surplus -1.3% 3.9% 15.5% 9.2% 6.0% 3.0% -2.6% 4.6% 17.4% 20.3% 13.4% 13.1% 26.0% 28.7% 23.7% 22.5%

Smoothed Surplus 0.7% 5.1% 8.6% 8.6% 6.1% 3.7% 4.2% 6.5% 14.1% 17.0% 15.6% 17.5% 22.6% 26.1% 24.9% 26.8%

Component Limited Seasonal Surplus -4.5% -3.2% 6.4% 3.0% -2.5% -4.1% -6.0% -8.0% 5.3% 6.4% 6.2% 5.3% 10.0% 7.5% 5.4% 3.0%

Component Limited Smoothed Surplus -4.7% -0.4% 2.1% 2.3% -1.2% -4.2% -6.1% -2.9% 1.2% 6.0% 6.0% 7.2% 7.6% 7.6% 5.3% 5.3%

Q1'04 Q2'04 Q3'04 Q4'04 Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07

5% Balance with components constrains

OverSupply

Shortage ShortageOver

SupplyTight

OverSupply

10% Balance withoutConsidering components

Source: DisplaySearch Supply-Demand & Capital Spending Report


Sell Through is Good. But Too Many Panel Inventory

TV Share by Week by Technology

12/25/04 4/30/05 9/24/05 11/26/05 12/17/05 12/31/05 1/14/06 2/11/06 2/25/06 3/11/06 3/18/06

CRT TV 67.3% 62.8% 56.0% 48.1% 53.5% 55.3% 50.2% 52.3% 50.7% 50.0% 50.2%

LCD TV 6.8% 11.2% 15.8% 14.8% 19.9% 21.0% 22.5% 23.0% 22.3% 23.8% 23.0%

PDP TV 1.4% 2.9% 5.8% 5.5% 5.1% 3.5% 6.6% 7.4% 5.4% 5.8% 5.7%

CRT Projection 2.7% 4.3% 3.1% 8.7% 2.9% 1.3% 2.1% 2.7% 2.7% 1.7% 2.0%

LCD Projection 2.2% 3.1% 3.2% 5.9% 3.2% 1.6% 3.3% 1.7% 3.0% 2.8% 2.9%

DLP Projection 1.1% 2.4% 2.4% 4.4% 1.7% 1.0% 2.6% 1.7% 2.4% 2.1% 1.9%

LCOS Projection 0.1% 0.2% 0.3% 1.0% 0.8% 0.4% 0.9% 1.0% 1.5% 1.4% 1.2%

Combo TV 18.5% 13.0% 13.3% 11.6% 13.0% 15.9% 11.8% 10.2% 12.0% 12.3% 13.2%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

X’mas

Source: NPD Weekly N/A Sell-Through

After X’mas


The Gap of MNT Panel v.s. MNT Set

0

1

2

3

4

5

6

7

8

9

10

11

12

March April May June July August September October November December January February0

1

2

3

4

5

6

7

8

9

10

11

12

March April May June July August September October November December January February

Source: DisplaySearch Monitor Newsletter

Monthly MNT Panel shipment - Monthly MNT Set

shipmentMonthly MNT Set

shipment



2006 T2006 TFT LCD FT LCD Market Outlook Market Outlook TFT LCD TFT LCD Supply Chain & Supply Chain & TFT LCD Cost StructureTFT LCD Cost StructureKey component Key component Market Market TrendTrend-- GlassGlass-- Color Filter Color Filter -- Polarizer Polarizer -- TAC TAC -- Backlight & CCFLBacklight & CCFL-- Driver IC Driver IC WrapWrap--Up Up


ODM/OEM Brand

Notebook PC LCD Monitor

Small & Medium LCD

DSC,NAVI/Car TV

PDA

LCD TV

LCD Market Supply Chain

Large Area LCD

Mobile Phone

Distribution Channel / Retail Channel / Direct Sales Channels / End User Behavior

ODM/OEM Brand

ODM/OEM

BrandMP3 Player

Glass Substrate

Color Filter

Driver IC Back Light Unit Polarizer

Manufacturing Equipments

FPD MakersChemicals Power Supply

Color Resist

Photo Mask

PackagingTesting

Wafer Foundry

FramePCBFilm

FPC

TAC PVALGP CCFL/LED Film


17” vs 32” BOM Cost break down

17” MNT Panel BOM break down (Gen5) 32” LCD TV BOM break down (Gen6)

Source: DisplaySearch Cost model

• 17” monitor panels: backlight and color filter accounted 40% of BOM cost• 32” LCD TV panels: backlight and color filter accounted 52% of BOM cost



2006 T2006 TFT LCD FT LCD Market Outlook Market Outlook TFT LCD TFT LCD Supply Chain & Supply Chain & TFT LCD Cost StructureTFT LCD Cost StructureKey component Key component Market Market TrendTrend-- Glass Substrate Glass Substrate -- Color Filter Color Filter -- Polarizer Polarizer -- TAC TAC -- Backlight & CCFLBacklight & CCFL-- Driver ICDriver ICWrapWrap--Up Up


Yielded Glass Substrate Share Forecast• Corning’s capacity share increase a little bit throughout the forecast period due to Corning’s new tanks and

sole position in supplying very large substrate. • Corning will continue to lead with 60% by Q4’07• The share of NEG step up slightly due to new glass unit continually increase. • The TFT LCD Glass substrate market is moving to high centralization slightly.

Source: DisplaySearch Quarterly Glass Substrate Report

0%10%20%30%40%50%60%70%80%90%

100%

SCHOTT 0.3% 0.3% 0.3% 0.4% 0.6% 0.7% 0.9% 1.0% 1.1% 1.0% 1.0% 0.9%

NHT 8.4% 7.7% 7.0% 6.9% 6.5% 6.4% 6.2% 6.2% 6.2% 6.2% 6.3% 6.4%

NEG 15.5% 14.9% 16.6% 16.3% 15.9% 15.1% 15.8% 16.5% 17.1% 17.4% 16.6% 15.9%

Corning 56.9% 58.7% 57.8% 59.1% 60.3% 60.5% 60.7% 59.5% 58.5% 58.4% 59.4% 60.7%

AGC 18.8% 18.3% 18.2% 17.4% 16.7% 17.3% 16.4% 16.8% 17.1% 16.9% 16.8% 16.1%

Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07


Floating Scalable to very large size, but needs

polishing.

Maker: CorningNHT

Down Draw

Easier to control the thickness, but needs

polishing.

Maker: NEG

Fusion Width is scalable, no

polishing needed. But per tank capacity

is small.

Making the LCD Glass Substrate


Maker: Asahi


Generation MG Size V (mm) H (mm) Q4'05 Q1'06Gen4.5 730 x 920 730 920 6,651 6,523Gen5 1100 x 1300 1100 1300 7,316 7,012Gen5.5 1300 x 1500 1300 1500 8,978 8,479Gen6 1500 x 1850 1500 1850 8,821 8,033Gen7 1870 x 2200 1870 2200 9,766 8,960Gen7.5 1950 x 2250 1950 2250 10,968

Glass Substrate Price ( Japanese Yen / M²)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Gen4.5 Gen5 Gen5.5 Gen6 Gen7 Gen7.50

2,000

4,000

6,000

8,000

10,000

12,000

Area(m²)Price(Yen)


Good Gen7 Price High Gen5.5

Price

Gen6Go down faster


TFT LCD Glass Substrate Supply/Demand* Supply situation will be OK because of Asahi and NEG are getting mature in larger substrate. But Gen7~Gen8 remain the sole supplier Corning. It will be highly depending on the Corning allocation for Gen7~Gen8.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Uni

t: 00

0 m

2/m

o

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Glass Supply 5,181 6,099 7,281 8,031 8,509 9,174 9,982 10,692 11,434 12,031 12,619 13,168

Demand (DisplaySearch) 5,050 6,126 7,502 7,858 8,214 8,808 9,306 9,544 9,426 10,160 11,525 11,857

S/D % 2.6% -0.4% -2.9% 2.2% 3.6% 4.2% 7.3% 12.0% 21.3% 18.4% 9.5% 11.1%

Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07



Corning Eagle XG glass

• Corning announced EAGLE XG in the 2006 DisplaySearch US FPD conference. • This extra green product advancement is the first active-matrix liquid crystal display

(LCD) glass substrate free of arsenic (As), antimony (Sb) and barium (Ba).

Corning Eagle 2000 Corning Eagle XGArsenic(AS2O3) <1.5% 0%Anitimony(Sb2O3) 0% 0%Barium (BaO) 0% 0%

Source: Corning

Existing New



2006 T2006 TFT LCD FT LCD Market Outlook Market Outlook TFT LCD TFT LCD Supply Chain & Supply Chain & TFT LCD Cost StructureTFT LCD Cost StructureKey component Key component Market Market TrendTrend-- Glass SubstrateGlass Substrate-- Color FilterColor Filter-- Polarizer Polarizer -- TAC TAC -- Backlight & CCFLBacklight & CCFL-- Driver ICDriver ICWrapWrap--Up Up


CF In-house vs. external procurement Share

•• Merchant regains slows Internal share slightly with DNP & Toppan G7.5 fabs, but trend still strong towards Internal.

Note: Yielded 14.1” forecast output capacity per month

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Merchant 44% 43% 42% 40% 38% 36% 35% 34% 33% 32% 32% 32% 32%Internal 56% 57% 58% 60% 62% 64% 65% 66% 67% 68% 68% 68% 68%

Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08

•• Internal Exceed Merchant. As TFT LCD maker tend to build the

new TFT along with CF

the new generation CF will not influence the overall supply

demand generally. Only the specific case (yield rate) will impact

the overall supply demand


Color Filter Supply/Demand (14.1” BaseBase）

05

1015202530354045505560657075

14.1

" (M

illio

n U

nits

/Mon

th)

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

(Sur

plus

/Sho

rtage

)

CF Demand st DS Forecast 18.0 19.6 18.8 22.7 26.0 31.9 38.7 38.8 36.1 36.9 42.1 46.2 43.2 44.9 51.4 55.7

CF Supply 17.2 19.1 20.7 23.6 26.9 32.7 39.3 40.4 41.5 45.2 48.5 54.1 59.9 64.5 68.5 71.0

Demand at Full Utilization 18.4 20.6 22.7 25.7 28.5 33.3 38.5 42.9 44.8 47.5 50.3 55.4 60.9 65.3 70.0 74.9

CF Glut at DS Forecast -4% -3% 9% 4% 3% 2% 1% 4% 13% 18% 13% 15% 28% 30% 25% 22%

Glass Glut at DS Forecast -4% -2% 8% 2% 2% 1% 0% 3% 11% 14% 6% 5% 14% 15% 8% 3%

CF Glut at Full Utilization -7% -8% -10% -9% -6% -2% 2% -6% -8% -5% -4% -2% -2% -1% -2% -5%

Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407

* DS Forecast = DisplaySearch Forecast On Panel Demand , Full Utilization = Assume all fab are in full utilization.


CColor Filter olor Filter Supply Chain By SupplierSupply Chain By Supplier•• LPL and CMO have over 90% in house CF .

0% 20% 40% 60% 80% 100%

Samsung

LPL

AUO

CMO

CPT

HannStar

Innolux

QDI

Toppoly TPNDNPTRYSTIACTISintekCandoAMTCIn house

Source: DisplaySearch Quarterly Color Filter Report


slit & spin coating

spinning

Spin coating spin-less coating

Color Resist Coating in Color Filter ProcessColor Resist Coating in Color Filter Process

Ink Jet Printing

Spin Slit + Spin Slit only Reverse PrintingOr Inkjet

3.5G – 4G4G – 6G

6G – 7G

extrusion

ReversePrinting

* No exposure, equipment cost down• Not stable in VA panels • Reduce the space of the clean room• Ink is not stable for Ink Jet Printing

• Traditional• Unable to handleGen4 and abovesubstrate

•Waste onColor Resist

• No waste on color resist• designed to cope with large substrate • Machines are big, clean room space requirement

10% Cost Down Source: DisplaySearch Quarterly Color Filter Report



2006 T2006 TFT LCD FT LCD Market Outlook Market Outlook TFT LCD TFT LCD Supply Chain & Supply Chain & TFT LCD Cost StructureTFT LCD Cost StructureKey component Key component Market Market TrendTrend-- Glass SubstrateGlass Substrate-- Color Filter Color Filter -- Polarizer Polarizer -- TACTAC-- Backlight & CCFL Backlight & CCFL -- Driver ICDriver ICWrapWrap--Up Up


Polarizer cost structure Normal PolarizerNormal Polarizer VA PolarizerVA Polarizer

PSAPSARelease filmRelease film

Protective filmProtective film

PVAPVATACTAC

TACTAC

Surface ProtectionFilm17%

TAC42%

PVA10%

CompensationFilm26%

Adhesive layer0%

Release Film5%Surface

ProtectionFilm23%

TAC56%

Adhesivelayer0%

ReleaseFilm7%

PVA14%

Materials80%

Director labor9%

Indirectorabor7%

Depreciation4%

Polarizer total cost structurePolarizer total cost structureCost StructureCost Structure Cost StructureCost Structure

PSAPSA

PVAPVATACTAC

Compensation FilmCompensation Film

PSAPSA

PVAPVATACTAC


PSAPSA

PVAPVATACTAC

TACTAC

PSAPSA

PVAPVATACTAC


Double BiaxialDouble Biaxial Single BiaxialSingle Biaxial

Source: DisplaySearch Q206 Quarterly Optical Film Report


2005 TFT-LCD Polarizer Shipment share by Suppliers

Area Base

Nitto33%

Santriz9%Sumitomo

12%Polatechno

2%

LG Chem.17%

Ace Digitech2%

Optimax20%

Daxon3%

Others2%



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Skypolar 0.0% 0.0% 0.0% 1.0% 1.7%

CMEL 0.0% 0.0% 0.0% 0.2% 3.0%

Daxon 0.0% 0.8% 3.7% 3.7% 3.1%

ACE Digitech 1.6% 2.9% 3.0% 2.8% 2.2%

Polartechno 4.1% 3.0% 2.2% 2.2% 2.0%

Sanritz 14.3% 13.0% 9.5% 8.3% 8.2%

LG Chem 9.4% 11.6% 12.7% 14.2% 12.0%

Sumitomo 18.5% 15.3% 13.1% 13.0% 16.1%

Optimax 17.5% 19.5% 20.0% 20.1% 17.7%

Nitto Denko 34.7% 33.9% 35.8% 34.6% 34.0%

2003 2004 2005 2006 2007

W/W Polarizer Capacity Share (Area Base)



TAC Demand-SupplyTAC makers has increased the new capacity in Q4’06, causing a better supply scenario.But Q3’06 will be still shortage due to strong demand of LCD TV panels consuming large area TAC film.

0

100

200

300

400

-5%

0%

5%

10%

15%

(Sur

plus

/Sho

rtage

)

TAC Capacity 252 270 305 320 355 375 445 465 TAC Demand 251 274 302 304 327 356 432 442

TAC Supply Demand -1.0% -3.0% 1.0% 5.0% 8.0% 5.0% 3.0% 5.0%

Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06

Million Square Meters

Source: DisplaySearch Quarterly Optical Film Report


$-

$10

$20

$30

$40

$50

$60

$70

$80

15.4_1280x800_TN TN $9.4 $9.2 $8.9 $8.7 $8.5 $8.2 17.0_1280x1024_TN TN $12.6 $12.2 $11.9 $11.6 $11.3 $11.0 32.0_1366x768_VA VA $37.6 $35.8 $34.0 $32.3 $30.7 $29.1 37.0_1366x768_VA VA $50.1 $47.6 $45.2 $43.0 $40.8 $38.8 42.0_1366x768_VA VA $70.8 $66.4 $62.2 $58.3 $54.7 $51.3

Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06

Polarizer Price Trend

15.4_1280x800_TN -2.6%17.0_1280x1024_TN -2.6%32.0_1366x768_VA -5.0%37.0_1366x768_VA -5.0%42.0_1366x768_VA -6.3%

Q3’05-Q4’05 QuarterlyAverage Price Reduction

The VA Compensation Polarizer War between Nitto Denko’s X-plate and Optimax’s F9 (co-developed with Fujifilm) will drive the TV polarizer price down faster in 2H’06



L/A TFT LCD Polarizers Supply Chain (LCD TV)CompanyNative Company Name Samsung

LG.Philips LCD

BOE-Hydis

TMDisplay Sharp

Sanyo-Epson AUO CMO

Japan Nitto 40% 30% 90% 62% 30%Japan Sanrtiz 30%Japan Sumitomo 60% 15% 10%Japan PolatechnoKorea LG Chem 55%Korea Ace DigitechKorea Shinwha OptTaiwan Optimax 8% 70%Taiwan DaxonTaiwan Chi MeiTaiwan SkypolarTaiwan PolarayOthersTotal 100% 100% 0% 0% 100% 0% 100% 100%

LCD TV Polarizer Value Chain




2006 T2006 TFT LCD FT LCD Market Outlook Market Outlook TFT LCD TFT LCD Supply Chain & Supply Chain & TFT LCD Cost StructureTFT LCD Cost StructureKey component Key component Market Market TrendTrend-- Glass SubstrateGlass Substrate-- Color Filter Color Filter -- Polarizer Polarizer -- TAC TAC -- Backlight & CCFLBacklight & CCFL-- Driver ICDriver ICWrapWrap--Up Up


BEF Film MakerBEF Film Maker

Film Cutting TrimmerFilm Cutting Trimmer

Package & Shipment Package & Shipment

CCFL Supplier CCFL Supplier

Lamp Set Packer Lamp Set Packer ( Sub Contract) ( Sub Contract)

Welding & Assembly Welding & Assembly

Diffuser Film MakerDiffuser Film Maker

Film Cutting Trimmer Film Cutting Trimmer

Light Guide Plate Raw Light Guide Plate Raw Material Suppliers Material Suppliers

( PMMA )( PMMA )( ( ZeonorZeonor ) )

BLU MakerBLU Maker

Reflector film Reflector film MakerMaker

Film Cutting Trimmer Film Cutting Trimmer (In(In--House or Sub Contract) House or Sub Contract)

Light Guide PlateLight Guide PlateMaker Maker

(Printing / Injection) (Printing / Injection)

Metal FrameMetal FrameMaterials Materials

Metal FrameMetal FrameMakers Makers

Backlight Structure


Total CCFL/EEFL Capacity % By Supplier

Not

e: T

otal

cap

acity

, all

appl

icat

ions

and

all

size

s. B

ased

on

man

ufac

ture

rs’p

lans

, but

cap

acity

>5

mon

ths

out u

ndec

ided

(i.e

. no

PO

s)

•Top 5 share decrease from 63% in Q4’05 to 57% in Q4’06, and will further go down to 54% in Q4’07. The CCFL industry is gradually becoming decentralizing.

Lamp Supplier Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407Harison Toshiba 16% 16% 15% 14% 14% 13% 13% 13% 13%Sanken 13% 13% 13% 13% 13% 13% 13% 13% 13%Matsushita 15% 15% 14% 14% 13% 13% 13% 13% 13%Stanley 6% 6% 5% 4% 4% 3% 3% 3% 3%NEC 11% 10% 11% 10% 9% 9% 9% 9% 9%Kumho (Korea) 8% 8% 8% 8% 7% 8% 8% 8% 8%Heesung (Korea) 6% 6% 7% 6% 6% 6% 6% 6% 6%Wooree ETI (Korea) 6% 7% 7% 7% 7% 8% 8% 8% 8%Wellypower (Taiwan) 7% 8% 8% 8% 8% 8% 8% 8% 9%Delta (Taiwan) 4% 4% 4% 5% 6% 6% 6% 6% 5%GIO (Taiwan) 1% 2% 2% 4% 6% 5% 5% 5% 4%Sintronic (Taiwan) 1% 2% 2% 3% 2% 2% 2% 2% 2%Hitachi (Taiwan) 3% 2% 3% 3% 4% 4% 3% 3% 3%CPT (Taiwan) 0% 0% 1% 1% 1% 1% 2% 3%Total 100% 100% 100% 100% 100% 100% 100% 100% 100%

Source: DisplaySearch CCFL & Backlight Report


Large TFT CC/EEFL Share By Application By Supplier

• Due to the competition from Korea and Taiwan, as well as the higher technical barrier for NBCCFL and TV CCFL, Japanese makers are shifting their focus to Notebook and LCD TV CCFL.. The conservative attitude of Japanese CCFL companies are limiting the capacity of CCFL. • CCFL makers are investing by Market Demand Base rather than TFT LCD Capacity Base. • Korean CCFL makers and Taiwanese makers are emerging in the LCD TV area.

Japan

Korea

Taiwan

NB MNT TVTop 5 share 95% 71% 90%



* Many CCFL suppliers of Taiwan, Japan and Korea are expanding aggressively, and large capacity is expected for 2H’06. Overall tight situation will be reversed from 2H’06.

CCFL Supply Demand Outlook

* DS Forecast = DisplaySearch Forecast On Panel Demand , Full Utilization = Assume all fab are in full utilization.

0102030405060708090

100110120130140150160170180190200210220230240250

(Mill

ion

Uni

ts/M

onth

)

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

(Sur

plus

/Sho

rtage

)

CCFL Demand st DS Frcst 103.8 113.0 122.5 133.2 140.7 142.8 159.4 188.5 196.1

CCFL Capacity 103.1 115.1 124.7 140.1 157.2 172.0 186.8 199.1 211.7

Demand at Full Utilization 106.4 129.3 140.9 155.1 168.0 193.7 224.8 241.3 239.9

CCFL Glut at DS Frcst -1% 2% 2% 5% 11% 17% 15% 5% 7%

CCFL Glut at Full Utlztn -3% -12% -13% -11% -7% -13% -20% -21% -13%

4Q05 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407


Wooyoung, Radiant, Coretronic, Pontex, Kenmos, JinMinShang, GLT, Enplas, Zeon,

Light Guide Plate

Arima Optoelectronics, Tekcore, Lumileds, Lite-On, LEDTech, Rohm, Samsung, Toyoda Gosei Nichia, New SEADA, Solid Guide, Taiwan Oasis, Osram,Stanley, LG, Toshiba, Agilent, Unity Opto, Epistar, Everlight,

LED

Stanely,Nippon ED, Chatani, Nippon Denyo, Fujitsu Kasei, Sharp, Tama, Seiko-Epson, Taitsu, Kiryu, Yamato, Hitachi, Kuroda, Mitsubishi, Yuka

JapanBLU Makers

Radiant, Coretronic, K-Bridge, Forhouse, Prokia(Kenmos), Chilin, Nano, SET(Sharp Taiwan), Helix, KHE, Nano-Op, Forward,

Taiwan

Asahi, Teijin,

Korea Wooyoung, Taesan LCD, DongSan LCD, DID, Heesung, Shinpyung, SangNong, Sungwoo LCD ,Wonwoo, eLiteCom, Hansol LCD,

Reflector

Suppliers and Current Share BLU Components

Keiwa (48%), Tsujiden (30%), SKC (20%), Kimoto (5%), Hitachi Chemical, Pioneer, Diffuser (Materials)

Harison-Toshiba (17%), Sanken(14%), Panasonic-West(15%), NEC (10%), Stanley (7%), Kumho (9%), Wellypower (11%), Others,

CCFL

Asahi Kasei(35%), Mitsubishi (30%) Kuraray (18%), Sumitomo Kakaku(<1%), Chi-Mei Corporation (10%)

LGP Raw Materials

3M (75%), Efun (19%) , Mitsubishi Reyon(1%), Goyo (5%)BEF(lens)

L/A TFT LCD BLU Supply Chain



NB MNT TV TV TV TV15.4"W 17" 26"W 32"W 40"W/42"W 46"W/47"W

CCFL 7% 17% 23% 22% 19% 23%Lightguide 10% 12% 0% 0% 0% 0%

Diffusion board 0% 0% 8% 10% 16% 16%Diffusion sheet 13% 8% 5% 7% 3% 2%Reflective sheet 6% 6% 2% 5% 3% 2%

BEF & DBEF 25% 12% 11% 9% 24% 20%Metal Bezel Backt 12% 13% 8% 7% 5% 5%Others Materials 8% 12% 6% 7% 5% 6%

L.O.P.,SG&A, Package 17% 19% 9% 9% 7% 6%Inverter Cost 0% 0% 29% 24% 18% 20%

Total Cost (w/h Inverter) 100% 100% 100% 100% 100% 100%

Size

Base: Q4’05 , CCFL Backlight. DBEF-less in 32” and below LCD TV Panels

L/A TFT LCD BLU Cost Structure By Sizes • CCFL is always a key portion in LCD BLU, for LCD TV BLU, inverter is critical too. • As long as an emerging trend to take away DBEF in 32” and below LCD TV BLU, the BEF &

DBEF portion is reducing. But for 37” and above, no substitution to replace DBEF yet.



Company 2004 2005 2006 2007K-Bridge 14.4 19.8 24.0 27.6 Coretronic 18.3 38.7 65.4 81.6 Forhouse 12.6 15.3 19.8 21.6 Kenmos 6.0 8.6 10.5 10.8 Radiant 25.2 33.6 48.0 60.0 Forward 9.6 11.1 15.9 18.0 Taesan 20.4 25.2 30.3 38.1 Wooyoung 9.6 11.4 12.0 14.4 DS-LCD 6.0 10.8 13.2 13.2 Heesung 9.6 15.9 22.2 24.0 Hansol 6.0 8.4 9.9 10.8 L & F 4.8 12.0 15.0 19.5 Stanley 15.0 18.0 18.0 18.0 Sharp 12.6 17.7 22.8 25.2 Yuka 1.8 5.4 6.0 6.0 Others 22.8 28.2 30.0 36.0 Total 194.7 280.1 363.0 424.8

W/W L/A LCD BLU Capacity By MakersMillion Units

By Factory Locations

By Makers Nationalities



Sharp19%

Wooyoung7%

L&F2%

Wonwoo7%

Heesung17%

DID1%

DS LCD5%

Hansol4%

Coretronic15%

Fuchi2%

Kenmos5%

Forhouse1%

CLT6%

AUO0.3%

Hitachi1%

K-bridge2%

Radiant3%

Tama1%

2005 LCD TV Backlight Shipment Share

20”

31 Million

<20”

22-27”

32”

37”~55”



Backlight Technology Comparison

CCFL EEFL LED OLED FFLPrice (Now) 1X 1X 2.5X~3X ? ?Price (2H'06~1H'07) 1X 0.9X 1.8X~2X ? ?Strike Voltage 1KV~1.2KV 1.5KV~2.5KV <10V <10V 24VColor Gamut (NTSC) 70%-72% 70%-72% 100% 100% 80%Life Time (Hours) 50K~60K >60K 50K 12K~15K 100KGas Ar. Ne Ar. Ne - - XePower Consumption Fair Good Excellent Good Not GoodInverter Design/Cost Easy/Low Lower Easy/Low Easy/Low Very Easy/Very LowLamps # (32") 16 20 - - -Mecury 4mg <4mg Free Free FreeColor Uniformity OK OK Not Good OK ?Brightness Efficiency(Lm/W 60~80 60~80 20~30 20 30Supply Status Open Limited Complex ? ?Issues to be solved Mecury Supply Issue Cost Lifetime Productivity

Supply Issue 40"+ Large Size Thermal Productivity Power Consumption

Color Gamut Control Circit Complexity Design Structure Cost

Design Structure


Light Sources at present Not Yet

Low High

Good

Cost

Mat

urity

CCFL(Cold CathodeFluorescent

Lamp)

EEFL(External Electron

Fluorescent Lamp)

LED(Light Emitting

Diode)

FFL(Flat Fluorescent

Lamp)

OLED(Organic LED)

CNT(Cabon-Nano

Tube)


Backlight Evolution (Notebook)• Initiated and patented by Mitsubishi Rayon. • To merge the Prism sheet (BEF) with the LGP (Light Guide Plate) by forming V-groove on LGP.• Cost is actually not reducing but increasing because V-cut LGP injection yield rate is not good. • Main reason to adapt : Brightness , Thinner Design

V-cut BLUMakers

Main TFT LCDCustomers

Yuka AUO, SEC

Enplas Sharp

Kenmos CMO

Coretronic QDI

Radiant AUO, CPT, QDI

Nano AUO, CPT, QDI

Mitsubishi LPL, SEC


Backlight Evolution (LCD TV)

Diffuser

BEF

BEF

DBEF

Conventional Direct Type LCD TV Backlight

New Light Source:4 Color CCFL, U-Lamp, LED, EEFL,

FFL, CNT, Flat LED

BEF + Diffuser Polzarizer

1. Replace DBEF with BEF + Diffuser

2. Micro Lense

Micro-Structure Diffuser Micro-Structure Collector

• In order to cost down, BLU makers and LCD makers are co-working to change the structureof the BLU through elimination on the films and develop new light sources.

3. Polarizing Reflection Nitto Denko PCF (or APCF)

4. Introducing new BEF sourcesEfunLG Chemical SKCGoyo Giko


LED Backlight For Notebook PC

Source: www.sonystyle.comSONY VAIO TX

Pros: Thin and light Backlight, No inverter, Mecury Free, Thin Bezel, Lower Power Consumption

Toshiba Libretto U100

Fujits T70

Con: Cost, Constrained to high end products

Now 2H’06~

11” 12”-13”

Notebook TFT LCD LCD Maker Luminance LED #Sony VAIO TX 11.1"WXGA+ TMDS 240 nits 40Toshiba Libertto U1007.2"WXGA Sharp 220 nits 12Fujitsu T70 10.6" WXGA Samsung 170 nits 20


LED Backlight For LCD TV Pros: High Color Saturation, Dynamic Contrast Control, Blinking Banklight to reduce response time.

Con: Cost, Constrained to high end products

SONY Qualia40” & 46”

2H’06~

32”~37”40”-46”40”/46”

1H’05~

Samsung32” CLT-TFT *CLT=Colorfilter Less TFT

LCD TV TFT LCD Panel Supplie Luminance LED #

Sony Qualia 40"WXGA+,46"WXGA+ S-LCD 500 nits 450

Samsung Protype 32" WXGA+ Samsunng 500 nits 300


The Issues of LED Backlight LED Brightness EfficiencyLED Package Improvement

LED Cost Thermal Solution

Structure Improvement

Color Decay Stability

LED Control IC

LED Backlight Structure


Backlight Forecast By Technologies

0

50

100

150

200

250

300

350

400

0%

2%

4%

6%

8%

10%

12%

14%

CCFL/EEFL Backlight 139 205.7 259.8 295.5 320.5 345.2 LED & FFL Backlight 0.3 2.3 10.5 28.5 44.8 Non CCFL/EEFL Share 0.2% 0.9% 3.5% 8.9% 13.0%

2004 2005 2006 2007 2008 2009

Million Base

Notebook 11” 12”/13” 15”/15.4”

Monitor 21”/23” 23”/24”

LCD TV

LED & FFL

40”/46” 32”/37”/40”/46”

Critical Path for LED BLU and FFL BLU will be Q4’06~1H’07, especially on the cost reduction



2006 T2006 TFT LCD FT LCD Market Outlook Market Outlook TFT LCD TFT LCD Supply Chain & Supply Chain & TFT LCD Cost StructureTFT LCD Cost StructureKey component Key component Market Market TrendTrend-- Glass SubstrateGlass Substrate-- Color Filter Color Filter -- Polarizer Polarizer -- TAC TAC -- Backlight & CCFL Backlight & CCFL -- Driver ICDriver ICWrapWrap--Up Up


Large Area TFT LCD Driver IC Market

Large TFT LCD Driver IC

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

$-

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

Q'ty ('000pcs) 853,341 1,253,002 1,760,389 2,846,138 3,681,708 4,430,975 5,157,813 5,870,815 6,632,882

Revenues ('000 USD) $1,429,876 $1,999,098 $2,877,162 $4,278,029 $4,958,020 $5,063,712 $5,857,280 $6,879,783 $7,128,141

ASP $1.68 $1.60 $1.63 $1.50 $1.35 $1.14 $1.14 $1.17 $1.07

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0

•Large Area TFT LCD Driver market is expected to grow to a US$7.1 billion market in 2010•From US$4.3 billion in 2005. 2006 market is expected to be US$5 Billion, 16% growth from 2005. The main driving forces are coming from the Notebook PC, MNT and LCD TV panels.


Large Area TFT LCD Driver IC Market share (2005)

2005 Large Area TFT Driver IC Ranking

Company Shipment(Million Market Share

Samsung 525 18.4%Novatek 507 17.8%Himax 475 16.7%NEC 470 16.5%OKI 200 7.0%Mangachip 186 6.5%Panasonic 105 3.7%DenMOS 86 3.0%Renesas 81 2.8%Sharp 45 1.6%Philips 40 1.4%Sunplus 37 1.3%Winbond 30 1.1%Others 59 2.1%Total 2846 100%

Others, 2.1%Sharp, 1.6%

Philips, 1.4%

Sunplus, 1.3%Winbond, 1.1%

Renesas, 2.8%

DenMOS, 3.0%

Panasonic, 3.7%

Mangachip, 6.5%

OKI, 7.0%

NEC, 16.5%

Samsung, 18.4%

Novatek, 17.8%

Himax, 16.7%


Driver IC trend for Large Panel

2003 2004 2005 2006 2007

Output Channel

PKG(PAD Ptich)

COF(38㎛)

TCP/COF(40~45㎛)

COF(35㎛)

384Ch(XGA/WXGA) / 420Ch (SXGA+)

480Ch (SXGA/UXGA)

600/618/630/642Ch

840/960/1024Ch

COF(25㎛)

COF(20㎛)

•COF (Chip On Film) More pin counts per driver (384/432/480 ch 642/720 ch)•COG (Chip On Glass) Smaller die size

Output Channel

Package(smaller die size)

COF IC

COG IC

384Ch/420 Ch/ 432Ch /480 ch

43㎛

35㎛

30㎛



2006 T2006 TFT LCD FT LCD Market Outlook Market Outlook TFT LCD TFT LCD Supply Chain & Supply Chain & TFT LCD Cost StructureTFT LCD Cost StructureKey component Key component Market Market TrendTrend-- Glass SubstrateGlass Substrate-- Color Filter Color Filter -- Polarizer Polarizer -- TAC TAC -- Backlight & CCFL Backlight & CCFL -- Driver ICDriver ICWrapWrap--UpUp


LCD Materials are ……………….

1. Influencing the Cost Structure of TFT LCD very much with 70%-80% BOM Cost.

2. The Market is becoming decentralizing especially for Optical Films, CCFL and Backlight. And more panel makers are taking vertical integrations. As long as panel makers are getting bigger through Merger, component makers are facing more pressure for price reduction.

3. The Challenges of LCD Component makers has been shifting from “Capacity Leadership to “Technology & Management Leadership” ---- Examples: Color Filters, LED backlights, Driver IC and Polarizer.


Please Come! 2006 Taiwan FPD International Conference

DisplaySearch

It’s a Flat World After All!

May 25-26, 2006Taipei International Convention Center

台北國際會議中心

www.displaysearch.com.tw


David Hsieh 謝勤益

DisplaySearch

An NPD Group Company.

[email protected]

886-2-6601-0045 0911-155-998

www.DisplaySearch.com

lcd cost break-down 2006 by displaysearch

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