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BACKGROUND INFORMATION ON THE INDUSTRY

In 2005, the total value of FPD1 sales worldwide was $65.25 billion (see Figure 1). Liquid crystal displays (LCDs) accounted for over 95 percent of FPD sales by value; thin-film transistor (TFT) LCDs accounted for over 90 percent of LCD sales; and large-sized TFT LCDs accounted for about 75 percent of the value of TFT LCD sales.2 The unit volume of large-sized TFT LCD panels in 2004 was 138.5 million displays. The unit volume of small- and medium-sized LCDs in that year was around 650 million (Young, 2005). The average annual growth rate from 1990 to 2005 in the real value of FPD sales was 23 percent. Real growth rates for TFT LCD sales are likely to be somewhat higher than those for FPDs.

Demand for TFT LCDs is a function of the demand for a wide variety of products, including, among others, televisions, personal computers, PDAs, camcorders, cell phones, and digital cameras (see Figure 2). The market for TFT LCDs and other FPDs became larger and increasingly diversified as the consumer electronics market moved toward digital and high-definition televisions and portable digital devices and as the size and quality of TFT LCDs increased.

Innovations in process technology along with vigorous competition permitted consumers to benefit from steadily declining prices over time. For example, prices of TFT LCDs declined with each successive generation of production equipment. Every time the glass substrate size for processing displays increased, a new generation of production equipment was created to match that size. With the entry of Korean and Taiwanese firms into the market, the demand for TFT LCDs increased in all markets where thinness and low power consumption were valued by consumers.

The potential market for FPDs is enormous. About 780 million cell phones were sold globally in 2005; 176 million TV sets; 145 million desktop personal computers; 62 million notebook computers; 9 million Personal Digital Assistants (PDAs); 10 million camcorders; 50 million MP3 players; and 85 million digital cameras.3 And yet, while TFT LCDs accounted for almost all notebook computer displays, camcorder viewfinders, PDA displays, and handheld TVs in 2005, they accounted for only around 60 percent of computer monitors and 10 percent of televisions. Until recently, most cell phones used Super Twisted Nematic (STN)

1

The term flat panel display encompasses a variety of display technologies, including LCDs, plasma displays, organic light-emitting diodes, and electroluminescent displays. Many of the statistics collected about the industry focus on the largest segment of the flat panel display market—LCDs. This chapter focuses mainly on LCDs.

2

An LCD is a thin, flat display device made up of any number of pixels arrayed in front of a light source or reflector. See http://en.wikipedia.org/wiki/Liquid_crystal_display for details. A color filter is required for color displays and, since the mid 1990s, most LCDs sold use a multiplexed active-matrix method of addressing the pixels that depends on the deposition of very small TFTs on the bottom glass panel of the device. See http://en.wikipedia.org/wiki/TFT_LCD. A large-sized panel is 10 inches or more, measured diagonally. Small- and medium-sized panels are less than 10 inches.

3

Various business press sources. The estimate for PDAs is for 2004.



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