11 Jul 2002
Analysts predict stunning growth for plasma displays in the next few years. Alfred Poor looks behind the not-so-thin screens to see if the potential is there.
Approximately 315,000 PDPs were sold worldwide in 2001, according to Stanford Resources. This number is projected to jump to 520,000 this year, and increase more than five-fold by 2005, when unit sales are expected to reach 2.8 million. Revenues should keep pace, growing from $2.7 bn (Euro2.7 bn) in 2001 to about $11 bn for 2005. So PDPs are going to be a runaway success - or are they?
These projections make a number of key assumptions. First and foremost, most PDPs sold to date have been for corporate boardroom or public display applications, not home entertainment. The growth figures are based on an increased demand for PDP TVs. If consumers are going to buy these devices for the home, prices will have to drop substantially. And with prices currently ranging from $6000 to more than $20,000, it's not hard to see why buyers might be a little reluctant.
Analysts with Stanford Resources point out that there is plenty of room for cost-cutting in the existing products. Material and component costs are already being driven down through a combination of improved technology and economies of scale for larger production volumes. Some key materials have already dropped in price by as much as 50%. Another factor is increased competition - Samsung and LG Electronics have both entered the market that was previously dominated by major Japanese companies including Matsushita, Fujitsu, Hitachi, Pioneer and NEC.
One result of this competition is increased investment in production capacity. In 2001, Samsung pledged to spend $1.3 bn over the next five years on R&D, production facilities and marketing, with the goal of producing 1 million PDP TVs. LG Electronics plans to be producing 1.55 million PDPs a year by 2005. Such large volume production should certainly drive down costs.
These appear to be reasonable assumptions, and the industry as a whole seems to be following the script. In addition to the significant Korean investments, major and minor players in the field are making strategic alliances to strengthen their competitive position; and the mainland China market seems poised for rapid growth as demand for high-priced consumer electronics increases.
If all of these companies expand production capacities, and the predicted unit sales hold true, prices could plummet simply as a result of over-supply. LG Electronic's goal of 1.55 million PDPs in 2005 would account for more than half of the 2.8 million total units that are forecast to sell that year.
Even if prices fall to half their current levels, they will still have to compete with other technologies, including large-format, direct-view LCD TVs, and front- and rear-projection systems based on a variety of microdisplay technologies. And even if they reach the predicted sales volumes, PDPs will still represent only a tiny portion of the TV market. According to DisplaySearch, about 153.5 million CRT displays were sold as TVs in 2001. That's almost 500 CRTs for every PDP. DisplaySearch predicts CRT TV sales to climb to 188.2 million by 2005, which will still be 67 times as many units as the projected PDP sales (most, but not all of which will be TVs). Such a minority position may make PDP TV niche products that will be more susceptible to changing forces in the market-place.
The success of PDP TVs also assumes some technological improvements, that may or may not come out of the research labs in time. To understand the problems that must be solved, it helps to understand how plasma displays work (see box at the end of this feature).
There are a variety of problems to be solved with this display technology. For example, how do you build the channels? Manufacturers have tried many ways to create the barrier ribs, including photo-casting, mechanical moulding, screen printing, and even sandblasting using fine abrasive powders or glass beads. This fabrication step is critical to managing manufacturing costs.
The panel requires high-voltage electrical current to create the plasma discharge, which has a number of consequences. First, the drivers must be designed to handle these voltages, which makes them more expensive than similar components for other displays. It takes considerable energy to make the process work - PDPs typically consume 280 to more than 500 W of electricity depending on size and design, which is considerably more than the 100-175 W required by large-format CRT or LCD TVs. Also, much of this energy is converted to heat, not light, and many PDPs require banks of cooling fans in the back.
There are also image quality limitations. The individual sub-pixels are either on or off, so shades of grey must be created by dividing the display time for an image into separate intervals called fields, and turning the sub-pixel on for the required number of fields to create the desired brightness level. The problem is that this creates visible artefacts on the screen - especially with moving objects - known as false contours. PDP designers have reduced the problem through complex systems to interweave the pattern of on and off fields for various shades, but it remains a problem.
PDPs may have high initial brightness - up to 600 cd/m2 - but the entire display loses brightness over time. This is similar to what happens with a CRT, but it occurs at a much faster rate. Some panels can lose 20% or more of their brightness per year, resulting in a fairly short lifespan that increases the cost of ownership.
PDPs are emissive technologies, and offer excellent viewing angles. Advances are making them more efficient - such as improved energy recovery systems for the individual cells - and producing sharper images - such as Fujitsu-Hitachi's "Alternate Lighting of Surfaces" (ALiS) that fills in between the rows of the images.
The rest of the display industry is not going to be sitting still while plasma manufacturers try to work out solutions to these problems. According to Bruce Berkoff, executive vice-president of marketing for LG Philips LCD, "PDPs are an interesting but very over-hyped technology. They require very high voltage, which keeps their cost and power requirements relatively high, as well as limiting their ability to lower their weight or thickness. LCDs will surely overtake PDPs for TVs past 30 inches or so, because they are lighter, thinner, more power efficient, and higher resolution."
And LCD manufacturers are making forays into new territory that used to belong to PDPs. According to Berkoff, "LCD TVs' image quality will improve a great deal by 2004/2005, and larger wide screens become more cost effective in the new 'Gen 5' fabs that can handle glass sheets over 1 m2. Our factory in Kumi, Korea - which will fully ramp up this year - will be the world's first of this size."
There are others who aren't willing to bet against LCDs in the race for wall space in homes around the world. Bob Raikes, managing editor of the industry newsletter Display Monitor admits: "I'm beginning to wonder if PDPs are ever going to be a profitable business, because the volumes don't offer the same advantages of scale that LCDs enjoy. They can get the driver costs down, which helps, but it's unclear what can be done next to cut costs. On the other hand, LCD makers have solved nearly all the issues relating to image quality, while PDPs still have problems with phosphor burn-in and lifetime. And new factories such as Sharp's Gen 6 Tatami plant will be able to make very large LCDs."
Clearly, plasma displays have the potential to become a significant factor in the home TV market, especially as the demand for wide-screen and digital displays grows. Whether the investment in technology research and manufacturing facilities will pay off will be decided by the pace of innovation, dropping prices, pressures brought by competing technologies, and no doubt a measure of luck.
How do plasma displays work?
PDPs are fabricated with tiny channels to create columns, which are then coated with phosphors in alternating columns of red, green and blue. A transparent top layer is sealed over these channels, and the space is filled with a mix of inert gases such as neon and xenon. Column electrodes behind the channels and row electrodes are contained in the top layer. Current applied to the top electrodes is triggered by the column electrode to create a plasma discharge from the top layer. This pulse consists of ultraviolet light, and is invisible. The light is directed down into the channel, where it strikes the phosphor layer, which in turn emits visible light.