Last week, we talked about the expected stabilization in the prices of flat-panel modules for TV sets. That stabilization can’t come too soon for makers of PDP modules, who managed to increase production by 21% in 2007, while generating 14% fewer sales dollars.

Ken Werner
Senior Analyst and Editor

The obvious culprit for the revenue decrease, says Displaybank’s Peter Kwon, is unit price, which dropped from $774 in 2006 to $552 in 2007.

Drilling down a bit into Displaybank’s data, 42-inch modules, which accounted for 73% of units shipped in 2006, fell to 56% in 2007. Shipments of 50-inch modules rose from 21% to 31% of the total, which presumably helped the aggregate ASP situation, even as 50-inch prices themselves are falling. Also pulling the aggregate ASP down was the 42-inch segment and the surging 30-inch-class modules, which jumped from 5% to 12% of total units shipped. The ASPs of 32-inch PDPs are low, but HD PDP-TVs in this size constitute a rapidly growing new segment for plasma, and an opportunity for plasma makers to participate more fully in the market for the most popular size of flat-panel TV. Full HD panels increased to 9% of the market at the expense of standard def, which dropped to 11%. HD remained constant at 79% level.

So how do things look for 2008? A lot better than you might expect. The sales for 2007 were depressed by a grim first half, with monthly sales falling below 700K, and revenue bottoming out in May. But August shipments were over a million, the first time monthly shipments ever reached that level, and they went over 1.5M in November.

Sales projections for 2008 are bullish, and more expensive FHD panels should account for an increasing percentage of sales. There are hints that Panasonic’s 2008 TV-set lines, which will be introduced "in the spring," may carry slightly higher prices than the 2007 lines, and only two of Panasonic’s many models for the U.S. market will not be FHD. Going into 2009, Panasonic will start producing panels on its new Amagasaki line, which will have a capacity of 1 million per month. How significant is this? Once Amagasaki ramps up, Panasonic, on this line alone, will be able to produce as many PDPs in a year as the entire industry produced in 2007.

Even in 2007, Panasonic (actually Matsushita Electric Company, which owns the Panasonic brand) was the 800-pound gorilla in the PDP room, producing 35% of all sets made. Samsung SDI and LGE were in a near tie with a bit more than a quarter of the market each, and Fujitsu Hitachi Plasma (FHP) Display and Pioneer were both in the single digits, according to Displaybank.

So, with PDP demand expected to be very healthy with the help of the Beijing Olympics, a shortage of LCD panels, and the looming digital transition in the U.S. (and despite the sinking U.S. economy), sales should be good. And, with FHD becoming the standard plasma format at Panasonic and more common elsewhere, and with sizes creeping up (except for the 32-inch segment, which is new business), 2008 could be a very good year for plasma in terms of revenue as well as units.

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