U.S. Cedes Flat Panel Display Market to Asia

Systems integrators looking to meet client demands to buy American for liquid crystal displays need to look again. Production of this popular data format won't be seen in the United States for quite some time, if at all.

Speaking recently to researchers on flat panel display technology at the National Institute of Standards and Technology's '96-'97 Colloquium Series, Musa painted a stark statistical picture of how far behind this country is in a technology that will continue to see major growth.

"The worldwide market for flat-panel displays is expected to reach $18.8 billion by the year 2000 and $20 billion by 2001," said Musa. "Computers are expected to account for 58 percent of the market, with LCDs making up 86 percent of the demand for flat panel displays. Currently, the Far East accounts for 99 percent of worldwide LCD production, a situation unlikely to change by the year 2001."

Flat panel displays, electronic devices used to present data on PCs, in operating rooms, in military craft and in automobiles, generally take up a small volume, weigh little, consume less power and produce less electric and magnetic field emissions than traditional cathode ray tubes, the bulky monitors seen on most office desktops.

Driving the demand for this technology are several factors, including size, weight, power demand and safety. Among the various types of flat panel displays are liquid crystal displays, light-emitting diodes, field emission displays, plasma display panels, electroluminescent displays and vacuum fluorescent displays.

Just this year, Sharp and Sony, two Japan-based market leaders, announced their intention to produce large-screen, flat panel displays together. Sharp itself introduced a 40-inch LCD on a trial basis in Japan. According to the company, Sharp has been the market leader in supplying LCD panels to major PC/notebook computer manufacturers worldwide since 1991. It now controls nearly half the original equipment manufacturer panel market.

Sharp predicts that large-format, thin-film transistors and color, super-twisted, nematic LCDs will begin replacing cathode ray tube desktop monitors in the fourth quarter of 1996 and possibly capture 5 percent of the desktop monitor market or 3 million units by 1997. For comparison, the color desktop monitor market in 1994 was about 40 million units worldwide.

Last year Sharp opened one of the world's most advanced LCD manufacturing facilities in Japan. Accepting the challenge, competitors Hitachi and Fujitsu announced earlier this year that each would invest $500 million to build new LCD facilities in Japan to produce flat panel displays for desktop computer monitors.

If that weren't enough bad news, the picture gets even darker when viewed economically. According to David Mentley, an analyst with the electronic display research firm Stanford Resources Inc., San Jose, Calif., even if an American company decided today to invest the estimated $1 billion needed to enter this market, it would take at least three years to get up to production speed.

While the United States does have some presence in the flat-panel display arena with companies such as Planar Systems Inc., Beaverton, Ore., in electroluminescent displays and groups such as the United States Display Consortium, a public/private entity started in July 1994, the effort pales in comparison to the industry support seen in Japan.

Even IBM has worked overseas for some time through IBM Japan's joint venture with Toshiba, named DTI Inc. of Tokyo, Japan, which started in November 1989. That venture plans to produce 200,000 units monthly of 12.1-inch, thin-film transistor color LCDs at IBM Japan's plant in Yasu.

According to Musa, the Asian strategy is to buy U.S. technology, invest heavily in manufacturing, accept low profit margins, make long-term commitments and count on significant government support. That same level of technical, political and infrastructure support is lacking in the United States, which places manufacturing on a lower pedestal than research and business services.

Today, display applications are classified as either low information content (limited information is displayed, refresh rates are slow and the information displayed is predictable) or high information content. Broadly speaking, light-emitting diodes, electroluminescent displays and vacuum fluorescent displays are best suited to the former, while plasma and all LCDs fall in the latter category.

Musa's center works on manufacturing issues thought critical to the emerging flat panel display industry in the United States. The near-term focus is next-generation manufacturing technologies, including projects in factory-level computer integrated manufacturing, development of sensor-based fabrication equipment and advanced processing. Long-term research focuses on next-generation devices and circuits with projects on improved materials and fundamental materials research.

The United States hopes to leapfrog in field emission display, where a breakthrough could alter the types of displays used in the future.

Questions about the Center for Display Technology and Manufacturing can be e-mailed to dtm-info@umich.edu.