LCD's Coming Up Strong as Flat Screen War Intensifies

According to Reuters, consumers are cheerful as prices for big flat-screen TVs drop, while producers are struggling to figure out which display standard will become dominant -- liquid crystal (LCD) or plasma.

Once the price drops, demand is rapidly increasing (flat screens in the 40-44-inch range) and analysts say that liquid crystal displays (LCD) producers will probably gain ground in a market dominated until now by plasma displays (PDP).

"Plasma display producers will cut costs, but LCD makers are investing massively into the big-inch TVs to grab a good share of the market, especially at 40 inches and above," said Hisakazu Torii, director of TV market research at DisplaySearch.

Companies like Japan's Matsushita Electric Industrial Co. Ltd. and South Korea's LG Electronics Inc. have preferred the plasma screens for 40-inch or larger TV sets since they are easier to produce in massive quantities and at larger sizes, giving plasma a financial advantage over LCDs.

Plasma based TV sets use tiny pockets of gases to display images, while LCDs use crystals inserted between glass. LCDs last longer than plasma screens but are not as bright, while plasma has a wider viewing angle, but consumes more power.

However, prices for LCD TVs will also come down strong this year, as LCD manufacturers are willing to cut their own costs, based on the basic materials price.

In 2005, the 40-inch LCD panel price dropped 36 percent, faster than a 31 percent fall for 42-inch plasma screens. DisplaySearch expects the panel prices to decline at a similar pace this year, with 40-inch LCDs and 42-inch plasmas both falling by about 25 percent.

DisplaySearch predicts LCD sets will account for 50 percent of the 40-44 inch flat TV market by 2009, compared with 6 percent in 2005, while plasma's share will fall to 49 percent in 2009 from 71 percent.

Plasma makers say their production cost-advantage and plasma's clearer images will give them a secure place in the fast-growing market. Makers such as Samsung SDI Co., LG Electronics and Matsushita also plan heavy investments to add capacity, raising concerns among analysts about a potential glut.