FLAT PANEL DISPLAY REVENUES TO RISE BY 8% IN 2007

DisplaySearch, the worldwide leader in display market research and consulting, indicated in the Q4'06 issue of its Quarterly Worldwide FPD Forecast Report that flat panel display (FPD) revenues for all applications, displays ranging from <1" to 70"+, are expected to rise 14% in 2006 to $85.5B compared to $74.8B in 2005. FPD unit shipments are expected to rise 6% to 3.4B panels in 2006, delivering 43.5M square meters of viewable display area, enough to cover 5,802 soccer fields.  Consumer demand for flat panel TV is driving FPD shipment growth.  Revenues for TV panels and imagers should rise 67% to $30.5B in 2006.  The report estimates that the TV market will account for 36% of all flat panel revenues in 2006, up from 24% in 2005 and 16% in 2004. While flat panel TVs are expected to account for just 33% of TV units in 2006, they are expected to account for 82% of TV display module revenues, up from 67% in 2005, and 48% of TV display module area, up from 27% in 2005.

Contributing to the explosive growth are rapid price declines, however, as producers and retailers battle for market share.  The report details how the FPD price per square-meter for TV panels has declined 25% per year since 2003.  In Q3'06, the areal price of PDP for TV was 8% below this falling trend line and the areal price of 30" and larger LCD for TV was on this trend.  This areal pricing trend is expected to continue.  Consequently, TV panel revenue growth should slow in coming years. FPD revenue from 30" and larger panels had a compound annual growth rate of 103% from Q3'04 through Q3'06 but the report estimates the Q3'06 to Q3'08 CAGR to be just 21%.  Despite 36% unit growth to 14.3M panels, plasma panel revenues are expected to be flat in 2007 due to rapid price declines at the largest sizes where PDPs are growing the fastest. LCD TV panels are expected to rise 48% on a unit basis to 81.2M with revenues up 23% supported by an increase in average size to 31". The significant pricing pressure in most applications will cause total FPD revenues to rise just 8% in 2007 to $92B.