The Flat Panel Display Industry focusing on TFT

1
The Flat Panel Display Industry(focusing on TFT)

• ?? ?? Mami Furuya
• ?? ?? Harunori Tsuruno
• ??? ?? Ken Gégout

2
Table of contents

• I. Industrial Dynamics
• a. Market Share (2003)
• b. Crystal Cycle
• c. Schumpeters Business Cycles
• II. Strategy
• a. Samsung
• b. Sharp
• c. Japanese firms
• III. Next Decade
• a. PDP
• b. Organic EL
• c. SED

3
Market Share (2003)
of Sales Southeast Asia 57.1 (blue)Europe
21 (purple)North America 20.9 (yellow)
4
Crystal Cycle

• 70s80s
• Technology ? Developed in US laboratories
• Japan ? Commercial manufacturing processes
• Schumpeter Invention has no economic impact
  Innovation only if applied in new productive
  arrangement
• 1990
• Cycles
• Opportunities for challengers to stir up/renew
  industry
• Firms
• Only entered during industry downturns
• Engage in counter-cyclical investment

5
Crystal Cycle

• TFT-LCD launched in 91
• Sharp, NEC, Toshiba, IBM
• Undisputed leaders
• Large investments
• Supply-demand imbalance
• ?1st downturn 1993-94
• Matsushita, Hitachi, Hosiden
• Too many new entrants
• Overheated growth
• Excess capacity
• ?2nd downturn 1995-96
• Samsung, LG
• Get technology w/o licensing
• Hire and take advantages of unemployed Japanese
  engineers

6
Crystal Cycle

• Asian financial crisis in 98
• Suspend all investments
• ?3rd downturn 1997-98
• Fend off Korean challenge
• Japanese license to Taiwanese
• 5 Taiwanese entrants
• Panels prices peaked in 99
• Fall continuously until 2001
• ?4th downturn 2001
• Joint Ventures are formed
• Toshiba/Hitachi Acer/Unipac
• New Taiwanese firms
• Singapore, China, India
• New challengers for the 5th

7
Schumpeters Business Cycles

• Theory (focus on macro-economy)
• Importance of cyclical behavior in industry as
  being linked to innovation
• Waves of creative destruction that such
  cyclical behavior could unleashed
• Flat Panel Displays Case
• Business world is inherently cyclical through
  operation of competitive forces
• Dynamic behavior of the economy reflects the
  effects of entrepreneurial endeavor
• Cycles are not regular
• Cycles create a context for strategizing

8
Table of contents

• I. Industrial Dynamics
• a. Market Share (2003)
• b. Crystal Cycle
• c. Schumpeters Business Cycles
• II. Strategy
• a. Samsung
• b. Sharp
• c. Japanese firms
• III. Next Decade
• a. PDP
• b. Organic EL
• c. SED

9
Strategy of Samsung-1

• Latecomer strategy and massive investment
• DRAM model
• Strong financial structure
• Sales 57.6 trillion KRW (approx.5 trillion yen)
• Operating profits12 trillion KRW
  (approx.1trillion yen)
• Source of funds DRAM profit

10
Strategy of Samsung-2

• Amount of investment in Tangjung plant by 2010
• 20 trillion KRW (approx. 2 trillion yen)
• Fast ramp up of 7G
• S-LCD 2005 start, 60K/month
• SEC 2006, 45K/month
• Substrate size 1,870x2,200mm
• 7G 40inch 8cuts
• Create 40inch TV market
• 8G start in 2006 4Q

Tangjung plant S-LCDs plant S-LCDjoint venture
of Samsung and Sony
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Strategy of Sharp

• Massive investment in Kameyama No.2 Plant
• Amount of investment 150 billion yen
• Start of operation oct.2006
• Worlds largest substrate 2,160x2,400mm
• 40inch 8cuts
• 1500 sheets/month
• Improve cost competitiveness

Kameyama No.2 Plant
12
Strategy of Japanese firms-1
Cost Competitiveness
Massive investment
Business integration
Patents
Keep LCD Tech. as black-box
13
Strategy of Japanese firms-2

• Cost Competitiveness
• Slash material costs
• partnership with parts suppliers
• Improve efficiency of operation
• Patents
• Strengthen strategy of intellectual property
• Sharp sued Taiwanese firm for LCD TV
• Matsushita sued LG for PDP technologies
• Fujitsu sued Samsung SDI for PDP technologies
• Keep LCD Technologies as black-box
• Prevent LCD technologies being leaked
• Massive investment
• Sharp invest 150billion yen in LCD plant
• Business integration
• Fujitsu transferred LCD operation to Sharp
• Hitachi made Fujitsus PDP business to
  consolidated subsidiary
• Pioneer took NECs PDP operation

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Table of contents

• I. Industrial Dynamics
• a. Market Share (2003)
• b. Crystal Cycle
• c. Schumpeters Business Cycles
• II. Strategy
• a. Samsung
• b. Sharp
• c. Japanese firms
• III. Next Decade
• a. PDP
• b. Organic EL
• c. SED

15
Next decade Market Scale

• Market Scale of FDP
• The current Scale ?4billion(?4??)
• After 2015 ?25billion(?25??)
• Annual growth rate ?17 for 25years
• Market Scale of Semiconductor
• (the largest market after World War II)
• The Current Scale?25billion(?25??)
• Annual Growth rate ?14/ for 40years
• ?????????????????(Display of the Next
  Generation)
• ??????? ?? ?

16
Other Competitive technologies

• PDP (Plasma Display panel)
• Organic EL Display
• SED
• (Surface Electron-emitter Display)

17
PDP (Plasma Display panel)

• (History)
• Around 1990, PDP was adopted as PC display, but
  out-competed by TFT.
• PDP come-backed as the large size FPD for TV
  (over 30inchies)around 2000.
• (Markets) the large size FPD for TV only.
• (Players) Hitachi/Fujitsu PD, NECPD, Matsushita
  PD, Pioneer PD,
• Samsung, LG,CPT
• (Technological advantages/disadvantages)
• Advantages
• Quick responding speed. Availability for the
  large size display.
• Disadvantages
• Large Expenditure of electronic power.

18
Organic EL Display

• (History)
• EL Phenomenon was found in 1936.
• In 1982, Eastman Kodak obtained breakthrough
  patent.
• In late 80s TFT out-competed Organic EL display.
• Pioneer adopted Organic EL display as the display
  for car navigation.
• Diffuse as Cellar phones display.
• (Markets)
• Cellar phones display, Note PC Display
• (Players)
• Sanyo, Pioneer, Eastman Kodak, Epson, Samsung,
  TDK
• (Technological advantages/disadvantages)
• Advantages
• Back light is not necessary.
• Simple device structure. (Lower production cost
  is expected.)
• Disadvantages.
• The technical difficulty for the development of
  the large size display (short life time, lack of
  brightness, un-discovery of the best organic
  materials for full color display)
• (New innovation!)
• Epson represented its success of the 40 inches
  OELD in 2004
• Samsung represented its success of the 21 inches
  OELD in 2005

19
SED (Surface Electron-emitter Display)

• (History)
• Theory of Field Emission Display was disclosed in
  early 90s.
• Professor Saito (Nagoya University) succeeded in
  utilizing carbon nano tube to FED.
• Motorola developed the prototype of full-colored
  FED.
• Toshiba/Canon jointly are developing SED improved
  from FED.
• (Markets) the large size FPD for TV.
• (Players) Toshiba/Canon
• (Technological advantages/disadvantages)
• Advantage
• Except for bright contrast, SED excels other type
  of FPD in technical points such as electric
  consumption, responding speed, viewing angle,
  brightness, color reproduction.
• Disadvantages.
• Fluorescent materials are still under
  development.

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FPD Technical comparison (?gt?gt?gt)
21
References

• Trade and Investment Strategies in the Flat
  Panel Display Industry (1968-1998)
• http//www.commercialdiplomacy.org/case_study/case
  _flatpanel.htm
• Industrial Dynamics and Corporate
  Strategy The Case of the Flat Panel Display
  Industry
• http//www.druid.dk/conferences/summer2004/papers/
  ds2004-203.pdf
• Wedge (2005/02)
• Nikkei Electronics (2005/03/28)
• Samsung ?HP? http//www.samsung.com/
• Sharp ?HP? http//www.sharp.co.jp/
• ??????????????? ???????? ????? Display of the
  Next Generation (Touyou Keizai Shinpousha -
  Izumiya)
• ?? (Seiden) Vol.31-5?2005/06 ?SED??????????????