Dominique Numakura's Newsletter from Japan

Headache of TV manufacturers

Flat panel TVs, especially large size models have experienced high growth in the last few years under the slow electronics market and it is expected to keep this growth for several more years. Many of the major electronics companies in Japan and Korea have been doubling the shipment of the flat panel TV every year however, the manufacturers know the business can not sustain this continuously.  The largest issue is the price reductions required almost on a daily basis. To expand demand and keep market share, they need to reduce the selling prices to survive in the competitive market. The price down rate is quicker than the speed of the cost down of the manufacturers.  The companies do not have enough room to keep the margins.

Another reason of the headache is the choice of the technologies. Previously, TFT-LCD was the major technology for the flat panel TV. The PDP technology was introduced for the large size models which provide clear color and high brightness but the big problem of PDP is high manufacturing cost. There has been a critical balance with the TV size between LCD and PDP with recent LCD technology enabling the screen sizes to increase remarkably.  On the other hand, rear projection TV appeared as an alternative technology for the large size TV. Its performance was not very good in the past but has improved with new imaging devices recently and has became a new promising candidate in the market because of low manufacturing cost. Several major companies such as Sony and Sanyo closed the PDP business and moved to the rear projection TV. 

Panasonic and Pioneer stay with PDP. Samsung Electronics and LG Electronics keep both of PDP and LCD.  Sharp focus on LCD, but it keeps the rear projection TV business.

There is one more new technology developed by Toshiba and Canon. It is SED (Surface Emission Device) TV. The manufacturers say the new technology provides better performance with lower cost compared to the current technologies for the large size flat panel TV.

Currently, no one knows what technology will be the major with the large size TV market in the future.  Probably, the manufacturers can not continue to develop all of the major technologies. It requires both a huge R&D budget and the investment to establish one technology and install the manufacturing lines for the volume business. The headache for management never disappears they have to decide which technology to pursue with the associated risks.

The situations of the vendors such as component manufacturers and PWB manufacturers are worse than the TV manufacturers. Their business depends on their customers decisions and they have to respond. When their customers are the winners they are lucky to win new orders but they are still required to make big discounts for their products.

Dominique Numakura

Headlines of the week

Panasonic Factory Solutions (Equipment supplier in Japan)
Has licensed the manufacturing of the encapsulation resin for its own flip chip packaging technology ESC Process to Kyocera Chemical.

Japan TI (Semiconductor manufacturer in Japan)
Will establish the manufacturing technologies of PoP (Package on Package) as the next generation 3D IC package for the DSP modules (Digital Signal Processor).

Micro Machine Center (Consortium of MEMS technology in Japan)
Started "MEMStation Service", introduction of the foundry service of MEMS devices for the eleven member companies. 

Sharp (Major electronics company in Japan)
Developed the world smallest and thinnest package for the new front-end module with a ceramic substrate. (10 x 10 x 1.4 mm)

Kyocera (Major device manufacturer in Japan)
Commercialized a new thermal printer head "KPR Series" for the printers of the digital photos.  Kyocera has more than 50% share of the device.

Elner (Major PWB manufacturer in Japan)
Has been considering the volume production of the multi-layer board and rigid/flex in Fukushima Plant to increase the manufacturing capacity.

Hitachi Industries (Equipment manufacturer in Japan)
Commercialized a new high-speed compact printer for the solder paste. (Cycle time: 6 seconds) The new printer is capable to set new condition in 30 seconds.

Sharp (Major electronics company in Japan)
Has developed a new 0.5 mm pitch 3D-SiP for the digital cameras. The unit packages are stacked after test to increase the whole yield.
 
Dowa Mining (Major copper supplier in Japan)
Is planning a new plant for the manufacturing of GaN substrates for the optical devices.

LG Philips LCD (Major display manufacturer in Korea)
Is planning to invest 500 million dollars in Poland to build a new large LCD module plant.  The new plant will start the operation in the second half of 2006.
 
Toray Film (Flexible laminate manufacturer in Japan)
Will install two more manufacturing line of adhesiveless flexible laminate "Meta Royal" by April 2006. The total capacity will be 1.2 million square meter per year.