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I have been trying to determine whether the Flat Panel Dsplay market is one with the potential to be a gorilla breeding ground. I've been able to put a few hours into this in the past week or so and I've discovered there is plenty of information out there as this is a large and crowded industry with plenty of upside potential as a whole. However the information is largely very expensive and I am attempting to do this without purchasing $2-4,000 reports. As a result I don't have much yet.

LCD is the incumbant technology with TFT (thin film transistor)being the current variant of choice. The alternative technologies that have a chance to displace LCD in the upcoming five to seven years include Low Temperature Polysilicon (LTPS), Plasma (PDP), Organic Light Emitting Displays (OLED), Field Emission Displays (FED), and Liquid Crystal on Silicon (LCOS).

TFT LCDs are expected to account for 93% of the 1999 market, 95% of the 2000 market and 96% of the 2001 flat panel display market on a revenue basis. TFT LCDs are expected to grow 62%, 49% and 10% on a revenue basis in 1999, 2000 and 2001 This according to Display Search, a FPD industry research and consulting organization.

Samsung was the top ranked TFT LCD supplier in 1999 although its market share declined slightly to 21.4%. Samsung was followed by LG.Philips, which climbed from #3 to #2 as its market share rose from 13% to 19.5%. An IBM and Toshiba joint venture, DTI, fell from #2 to #3 with a 19.3% market share. Hitachi rose from #6 to #4 as it boosted its share from 9.5% to 11.4% and Sharp fell from #4 to #5 although its market share increased slightly. Companies losing market share included NEC, Fujitsu and ADI, all of which placed an increased emphasis on the LCD monitor market. Not even a royalty play here really--just a bunch of chimps and monkeys--that is if I understand the GG terminalogy yet.

LCD monitors will grow 353% and 278% faster on a revenue and unit basis respectively than CRT monitors between 1999 and 2005. I am searching for actual display market growth-- all I have is this "relative to CRT data" so far.

Driving the LCD monitor market's growth will be lower prices which is expected to drum up new and larger market segments. DisplaySearch expects average 15" LCD monitor street prices to fall from $1050 in Q4'99 to below $575 in Q1'02 as the result of a large TFT LCD surplus associated with more than $6 billion in aggregate capital spending from 1999 to 2001. The surge in capital spending should double total TFT LCD capacity from 1999 to 2001, creating a significant over-supply and cause TFT LCD monitor module prices to fall up to 48% between Q4'99 and Q1'02. The cyclical TFT LCD and LCD monitor markets could then see prices increase in 2002 and 2003 and decrease again in 2004 and 2005 with average 15" prices eventually falling below $525. There definitely looks like a capital expenditure/increased production cycle in this industry--no Moore's law operating here.

This price drop will be a barrier to any displacing technology which will likely have to endure a period of high cost production until sufficiently sized production runs can increase efficiencies. However, there should be niche opprotunities for the appropriate technology, especially one that can be applied to curved surfaces and/or offers transparency--OLED leads the pack here. It is beginning to look to me like there is the potential for Gorilla breeding here. There are a whole lot of monkey's and chimps in the current marketplace though. And TFT LCD looks to be on main street. I don't think think that we have approached the early adopters stage with the alternative technologies yet and the chasm is not even in view.

I'm staying on this though. Will report more as I get it.
MStew

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