Changing relationships shake up LCD TV industry dynamics

Changing alliances and joint ventures among Asian TFT LCD panel makers is creating new opportunities for the flat panel display and TV industries. In the last year, many new relationships have been formed including alliances, mutual investments and supplier agreements. These new relationships are impacting fab expansion plans and timing, supplier-assembler-brand relationships, panel allocation by market segment and brand, regional supply strategies and more.

Samsung and Sony have aggressive strategies to each capture 20% share of worldwide LCD TV market, driving them to purchase more LCD TV panels from others panel makers and OEM TV makers, especially from Taiwan suppliers.

Among the top five brands, Sharp has the lowest Y/Y growth rate and has allocated more of its fabrication of LCD panels to external customers. The most significant is Sony. The most impacted TFT LCD panel makers by the Sony-Sharp joint venture will be Samsung Electronics, AU Optronics (AUO) and Chi Mei Optoelectronics (CMO). These three will have to re-assess their customer base when considering an investment in 10G fabrication facilities.

DisplaySearch estimates that the Sharp 10G glass substrate size will be 2880×3130 mm, which will provide better economic cuts of 40-inch and 46-inch panels for Sony than previous candidate sizes. 2880×3130 mm is also optimum for 57-inch and 65-inch panels produced 8-up and 6-up, respectively. Through the S-LCD joint venture of Sony and Samsung and their focus on the 40-inch and larger TV market, the two companies have successfully grown the 40-inch and larger LCD TV market, extended their brand recognition and market share and applied significant pressure on other TV brands.

DisplaySearch estimates that the recently announced IPS Alpha 8G fab will focus on 32-inch and 46-inch panels, as well as 52-inch LCD TV panels for Panasonic. Through the KDIA (Korea Display Industry Alliance), Samsung and LG Display (formerly known as LG.Philips LCD) will develop a complicated and delicate relationship covering their product plans, components and new fabs.

Through the alliance of Pioneer and Sharp, as well as Pioneer's announcement to retreat from plasma panel manufacturing, Pioneer will begin LCD TV manufacturing with assistance from Sharp. JVC will supply LCD TVs made at their Mexico plant to Funai, while JVC will market LCD TVs in Europe produced by Funai's Poland plant. Meanwhile, the two will possibly co-develop LCD TVs in the future.

DisplaySearch expects more joint ventures and alliances in the future, especially among smaller LCD TV panel makers seeking investments in expensive 7G and 8G fabs.