LCD Technologies

Contents

Introduction to Display Technology

Display technology plays a critical role in how information is conveyed. Since its commercialization in 1922 up until the late 20th century, Cathode Ray Tube (CRT) has dominated the display industry. However, new trends such as the desire for mobile electronics have increased demand for displays that rival and surpass CRTs in areas such as picture quality, size, and power consumption. One such technology that has replaced the CRTs is Liquid Crystal Display (LCD) due to their lightweight, low operating power, and compact design. LCDs allowed devices such as digital watches, cell phones, laptops, and any small screened electronics to be possible. Although LCDs were initially created for handheld and portable devices, they have expanded into areas previously monopolized by CRTs such as computer monitors and televisions. Other contenders for leadership in display technology are Organic light emitting diode(OLED) and Plasma Display.

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Comparison of LCD, OLED and Plasma Technologies

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LCD Technology

LCD is an electronically-modulated optical device made up of any number of pixels filled with liquid crystals and arrayed in front of a light source (backlight) or reflector to produce images in color or monochrome.

There are 2 types of LCD displays (based on the circuits that are responsible for activating pixels)

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An active matrix liquid crystal display (AMLCD) is a type of flat panel display, currently the overwhelming choice of notebook computer manufacturers, due to low weight, very good image quality, wide color gamut and response time. The most common example of an active matrix display contains, besides the polarizing sheets and cells of liquid crystal, a matrix of Thin film transistor(TFT) to make a TFT-LCD. These devices store the electrical state of each pixel on the display while all the other pixels are being updated. This method provides a much brighter, sharper display than a passive matrix of the same size. An important specification for these displays is their viewing-angle.

Twisted nematicdisplays contain liquid crystal elements which twist and untwist at varying degrees to allow light to pass through. A Super-twisted nematic(STN)display is a type of monochrome passive matrix LCD.STN displays provide more contrast than TN displays by twisting the molecules from 180 to 270 degrees. Film compensated Super-twisted nematic (FSTN) is a passive matrix LCD technology that uses a film compensating layer between the STN display and rear polarizer for added sharpness and contrast. It was used in laptops

LCD Industry Overview

Global Market Size of Display Industry


Predicted future revenue of TFT LCD Market

Source: Allitwares



After growing rapidly throughout the 2000s, industry revenues declined in both 2008 and 2009. While the immediate cause of this decline was the global recession, the display industry has also entered a mature phase. With notebook PCs and desktop monitors completely penetrated by TFT-LCDs, much of the growth in recent years has come from the TV market. Despite the recession, flat-panel-TV shipments grew on the order of 30% per year in 2008 and 2009. However, this growth is leading to high penetration rates, even in formerly emerging markets, such as China, and will push the flat-panel share of the TV market past 90% in 2011. This high penetration, combined with increasing pressure on prices, will lead to slower revenue growth, particularly for TFT-LCDs.


Market segmentation

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The TFT LCD display market is divided into 2 segments :

TFT LCD Segment revenue


Large Area TFT market

Year on Year there was an increase in shipments for all the products of large area TFT LCD. In total the revenue grew by 25% in 2010 up from 20% in 2009. After recession and a laggard growth of 11.5% in 2008, the market has picked up and the revenue is growing.

Key Business Drivers

Technology

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Here we observe that there is technology shift that is happening. Industry has moved from CRT to LCD now. The is shift has been gradual over the time. IT can be observed that there is a gradual decrease in the basic CRT and increase in the new technologies.

Research & Development

Demand

Market Analysis

Value Chain Analysis

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Players involved in the Value chain are

  1. Equipment/Material Suppliers: these are the industries which supply the basic material like ICs, Chemicals, and Liquid crystal etc. They help in putting the fundamental frame in place and start the process of manufacturing. They supply the basic and essentials parts required for the LCD.
  2. Panel Makers: Panel makers are the companies which make basic Skeleton for product. They design the panels according to the demand and requirement. They play a major role as to design the basic frame. They are the players who design the basic technology like LCD, AMOLED etc. these are the companies which do most of the R&D in the technology to improve and introduce innovations.
  3. OEM?s: OEM?s are the companies which do the work of assembling the parts and supplying it to different payers. They basically join everything and make it useful. They play an important role in the chain.
  4. Brands: Brands are the big organizations which have a value in the market. They add their brand name to the assembled piece and sometimes assemble the complete unit at their own location e.g. Samsung, Toshiba. Their brand value helps in determining the market value of the unit and sets a perception the consumers mind.
  5. Re-Seller: Re- sellers are various players who distribute and sell the product in the market. There can be different type like Retailer, DEPARTMENTAL STORES, and National Chain stores, Distributors etc they play an important role because they increase the reach of the organizations and make it easier for consumers. They help in building the consumer psyche as they help consumers in understanding the technology and product. They help in increasing the sales by providing the consumer feedback and POS data.
  6. Consumers: Consumers are the most important part as every product is designed keeping consumer in mind. All the margins of the players in chain depend in the consumers. If the product is not selling well margins go down and vice verse.

In the diagram above we can see that the most important factor which makes the equipment/material supplier crucial is ?Technology?. It provide the base for the other players/different stages. Similarly Panel makers have the advantage of capacity. They give the frame and final touch to the work of previous player. The ?profit? is added by OEM?s in the later stage which makes the product commercial. Brands helps with their captured market share. They make the product reachable to the market they captured. Reseller add ?margin? in this and make the product physically available for the final consumption. And at last consumers pay the ?price? for the product and completes the value chain cycle.

Market Segmentation

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The TFT LCD market is divided into Large area i.e >10 inches of display size and Small&Medium area i.e. 1.5 inches to 10 inches of display size. The major applications under Large area are:

The major application under Small & Medium area display are:

Analysis of Major segments

In terms of revenue, the top three segments in the TFT LCD market are:

However, Television is the sector that is growing the maximum, with a 60.3% growth in revenue in 2010 over the previous year. Followed by Mobile phones, with a growth of 13.7% in revenue in 2010 over the previous year. Then it is followed by Notebook PC, Automotive monitors and Desktop Monitor with a growth rate of 10.3%, 6.7% and 6.1% respectively.


Television(TV)

In 2010, TV captured 51.2% share of the global TFT LCD revenue and hence is a major segment of the market.


LCD TV in the worldwide TV market has been well placed in the developed nations. However, there is an increase in the sales of LCD TV in the emerging countries as well.























Desktop Monitor

In 2010, Desktop Monitor captured 16.6% share of the global TFT LCD revenue and hence is a major segment of the market.






Mobile Phones

In 2010, Mobile Phones captured 12.3% share of the global TFT LCD revenue and hence is a major segment of the market.



Source: Livbit




Porter's 5 Forces analysis


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  1. Threat of new entrants: Low
  2. Bargaining power of supplier: Low
  3. Bargaining power of buyer: High
  4. Threat of Substitutes: High
  5. Threat of Competitors: High

Model to measure market attractiveness

Market Attractiveness Model

Objective: This model can be used to study the attractiveness of a market and the various segments in the same. The model uses 3 parameters to measure the appeal of the market, namely:

To analyze the model, Likert Scale Model has been used with the following ratings:

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Each of the 3 parameters has been assigned the scale on different criteria?s (according to their nature), as given below:

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For each parameter weights have been assigned as following:

Weights have been assigned in order to calculate the weighted average of the 3 parameters assigned to each segment, which would help us in determining one unit on the scale for each segment, which will help us in determining the attractiveness of each segment.
Market size and Forecasted CAGR have been assigned 40% weigh each as these are the two most important parameters which will help in determining whether a company should enter into that segment of the industry or not. Market size would give the revenue in the segment at present and also the percentage share each segment captures of the total Industry. CAGR would determine the growth rate of the revenue of each segment and hence would be profitable in the future or not.
Competitor strength is assigned 20% weight. We need to see how strongly or loosely is the segment held by the top 3 players of that particular segment. If it is tightly held then entry becomes difficult and similarly if loose, then there is huge unorganized sector or too many players in the market.

Market Attractiveness Model ? LCD Technology

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Working of the model Following is the method used to calculate the market attractiveness model:

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Recommendations

Small Players

It is not advised for small players to enter the LCD industry as it is already in the consolidation phase. Many players like Samsung, have undergone vertical integration to optimize their costs. The initial investment required to enter the LCD industry is very high. In such a scenario, for a small player, who manufactures displays or products, will find it difficult to compete with giants like Samsung, LG etc on prices.

Big Players

Players who have the expertise, capital and capacity to invest in LCD market can consider entering Mobile phones and Notebook PCs market. For them to succeed in the LCD market, they can either specialize in producing LCD displays with the latest and best technology available or consider vertical integration to optimize their cost.

Reference