Plasma Panel Shipment Growth Decelerates
Published: 25 March 2009
by Mike Buetow
"On the supply side, two of the three Japanese plasma panel makers - Pioneer and Hitachi - have announced plans to withdraw from the business," said Riddhi Patel, principal analyst for television systems at iSuppli. "This leaves Panasonic as the sole plasma panel maker in Japan, and even this company just delayed its new Amagasaki production line."
The exits of Pioneer and Hitachi come after reorganizations at Korean plasma makers Samsung SDI and LG Electronics, which already had caused panel shipments to slow, says the research firm.
"On the demand side, sales growth for televisions and other plasma-display products is not what it used to be," Patel added. "Weak consumer spending and business purchases are discouraging plasma panel makers from ramping up production. The economic downturn is affecting both retail and business purchases."
Demand is bound to recover at some point near the end of this year or in 2010. However, 2009 is going to be slow across the board for plasma panel makers.
Quarterly plasma panel shipments will continue to follow the seasonal pattern, with sales rising during the second half of the year. However, second-half sales will grow at a far slower rate than in previous years, according to iSuppli.
To remain competitive amid current market conditions, plasma panel makers must alter their product strategies. While continuing to improve the picture quality and performance of their products, plasma panel makers need to place greater emphasis on reducing costs. They can achieve both goals by using better phosphors, single-scan technology or changing or enhancing the cell structures of their panels, says the firm.
One market trend is moving in favor of plasma makers: Consumers are demanding larger-sized televisions, which plays to the strength of plasma.
However, the television market also is moving toward the full H-D resolution, slimmer form factors and wireless connectivity. To compete with LCD, plasma makers and television brands must make strides on these fronts.
Key success factors for plasma panel makers and television brands include increased focus on 50" and larger sizes; more stress on new business areas beyond consumer televisions, such as digital signage, retail signage and more; cutting costs, and making full H-D resolution standard on all products.
After moving out of the area to focus on larger sizes, plasma television OEMs reentered the 32" market in the second half of 2007 because they detected a gap in the LCD-TV makers' offerings that they could capitalize on.
However, with 32" H-D LCD panels in ample supply, demand for PDP panels at this size has dropped dramatically. Even in emerging regions, there has been a slowdown in 32" plasma sales as consumers began seeking larger sets.
The outlook isn't much better on the 42" front, says the firm. While this size initially represented the sweet spot for plasma televisions, declining prices for LCDs - along with limited availability for full-H-D plasma panels - are impacting plasma's place in the market. As the LCD makers continue to move to newer generation fabs and their growing capability to produce even cheaper panels at the 40" and larger size range, this will squeeze the plasma market even further.
"For now, the sweet spot for plasma has moved to the 50" and larger market, where the cost benefits of choosing plasma give it an advantage over LCDs, Patel said. "But, just as in the 42" size, this advantage eventually will evaporate."
