Every two weeks, the Taiwan-based market intelligence firm WitsView Technology publishes a summary of display-panel average-selling prices (ASPs) by size and technology, compares them to the previous two-week period, and analyzes the results. For the first half of February, Witsview says, 32-, 37- and 42-inch LCD panels will all be down 2%.

Ken Werner
Senior Analyst and Editor

That brings the ASP of 42-inch LCD panels down to $600, less than the manufacturing cost for Korean manufacturers, WitsView says. The ASP for 32-inch panels will be $315; that’s less than the manufacturing cost for second-tier manufacturers and close to the manufacturing cost for first-tier makers. But the supply of wide-format 19- and 22-inch monitor panels has been tight, and the supply of 19s remains so. One result is that wide-format 19-inch monitors are being made on Gen 7 lines.

The price gap between 32- and 26-inch panels dropped to $53 in the second half of January, down from $170 a year before. That should translate to a set-level price difference of about $150, which is inhibiting demand for 26-inch TVs. Panel-makers hope to reverse that with lower-cost TN-type TV panels - the same LCD technology that’s used for monitors.

The ASP for 42-inch LCD-TV sets dropped $230 or 11.8% from the previous two-week period, while 42-inch PDP-TV sets dropped only $60 or 3.4%. That made the ASP for 42-inch PDP-TVs only $11 less than for LCD-TVs.

Making display panels at a cost that exceeds their selling price does not constitute a productive long-term business model. Panel manufacturers are managing their problem by shifting capacity from TV panels to monitor panels, and by creating closer relationships with TV set makers so they will have purchasing commitments lined up when seasonal demand increases in the second half.

Samsung has done relatively well by having close customer relationships with Sony and Samsung Electronics. Sharp seems to do well supplying its own TV division. Chi Mei has a close but not exclusive relationship with Westinghouse Digital, and a Chi Mei subsidiary is beginning to sell TV sets under the Chi Mei brand in the U.S. AUO is closely associated with BenQ, whose sales of LCD-TV sets hit a record high in January, although the company is still recovering from its ill-considered purchase of the Siemens cell-phone business.

And Taiwan’s third-larges LCD panel-maker CPT is considering an investment in the highly successful mainland-Chinese TV maker Konka, having already invested in the competing Xoceco. Getting a piece of the profits would be nice; guaranteeing demand for LCD panels in China’s rapidly growing flat-panel TV market is even nicer.

Let me close with a brief, and sad, digression. Alan MacDiarmid died yesterday at the age of 79. MacDiarmid, along with Alan Heeger and Hideki Shirakawa, won the Nobel Prize for Chemistry in 2000 for the discovery of electrically conducting polymers. In addition the inherent importance of their work, it provided inspiration for the development of other organic electronic components, including polymer OLEDs and organic thin-film-transistors, both important to us in the display community.

MacDiarmid grew up in New Zealand during the Great Depression, and his family was poor. He worked as a part-time janitor in the Chemistry Department at Victoria University College, later becoming a part-time and then a full-time student at the college. He eventually received doctorates from the University of Wisconsin and Cambridge University, and became a professor at the University of Pennsylvania.

If any of us require inspiration today, either technical or personal, we need look no farther than the life of Alan G. MacDiarmid.