Trading Markets: Samsung Electronics and LG Electronics, two of the largest chaebols in South Korea, agreed to purchase LCD panels from each other according to the Ministry of Knowledge Economy officials. Under the deal, Samsung will purchase at least 40,000 17-inch wide LCD monitor panels every month from LG Display. LG Electronics will purchase the same number of 22-inch wide LCD monitor panels from Samsung’s LCD division. The government has been strongly encouraging the two companies to work together to establish South Korea’s leadership in LCD manufacturing.
Will this arrangement really help South Korea to solidify its leadership in LCD manufacturing? Currently Samsung and LG Display are two of the world’s largest LCD manufacturer. According to DisplaySearch’s latest Monthly TFT LCD Shipment Database, LG Display captured 24.7-percent unit shipment market share in July followed by Samsung with 23.4-percent. Taiwan’s largest supplier, AU Optronics (AUO), took the third spot with a 16.8-percent share. In terms of area shipments Samsung took the top spot with a 26.8-percent share followed by LG Display with 25.1-percent. Taiwan’s Chi Mei Optoelectronics (CMO) edged out AUO with 15.7-percent versus 15.6-percent. If you combine LG Display and Samsung on a unit base the two captures 48.1-percent and based on area shipments that increases to 51.9-percent. South Korea is dominant. But will this 40,000 unit exchange between the two top suppliers help further solidify South Korea’s leadership? Read on for analysis regarding Rationale, Social Democracy, Korea Not Taiwan, Short End, Government Stay Out.
There is a certain reasoning that underpins the logic that South Korea’s Ministry of Knowledge Economy is using. Both LG Display and Samsung have been procuring LCD panels from Taiwan suppliers such as AUO and CMO when they could have supplied each other. LG Display and Samsung’s LCD fabrication plant designs are different enough that between the two of them they there are no holes in terms of LCD size. Instead of purchasing from Taiwan, Samsung could easily have purchased from LG Display. But in reality it isn’t that easy. Samsung and LG have been bitter rivals for a very long time. These two chaebols compete in everything from air conditioners, restaurants to LCDs. Many graduates from top universities end up working for one of the chaebols, but once you start your career in one you’ll most likely spend the rest of your life working there, if you’re lucky. Lifetime employment is not what it once used to be but for the few who have the diligence, the connections, the smarts, etc. it is still a possibility: once a Samsung, always a Samsung. So it is not unreasonable to assume that both Samsung and LG loathed the idea of working together. In fact it was this bitter rivalry that helped propel them to the top.
South Korea is a social democracy. The government wields immense power and can influence businesses, even chaebols, to do its will. At the top of the power pyramid is the president. No wonder there is so much corruption. The tried and true quote from John Emerich Dalberg Acton (a.k.a. Lord Acton) comes to light at the end of every presidential term: “Power tends to corrupt, and absolute power corrupts absolutely.” South Korea wants to be an economic power but the nation has significant challenges. There is Japan a fully-industrialized country with enormous wealth, technology and human capital just across the East Sea; North Korea borders the country and is a source of instability; and China is a dragon that has woken up from a long hibernation and is increasingly becoming powerful–politically and economically–and is challenging the world for hegemony. South Korea has established itself has leader in many areas thanks to a close relationship between the government and the chaebols that has led the country to capture top positions in ship building, semiconductors and LCDs.
From South Korea’s point of view the bitter rivalry between Samsung and LG has had a side effect of bolstering Taiwan’s LCD suppliers. When Samsung needs additional panels it has never gone to LG Display and vice versa. Instead Samsung would go to Taiwan and purchase LCD panels from AUO, CMO or others. The South Korean government wants to stop this.
It seems LG Display has gotten the short end of the bargain. The math is simple: 17-inch versus 22-inch. Samsung is selling to LG a significantly larger LCD panels that are worth more than the smaller 17-inch ones. Based on DisplaySearch’s latest PriceWise update a 5:4 17-inch LCD monitor panel costs an average of US$79. Compare that to a 22-inch wide LCD monitor panel that’s has an average price of US$105 in mid-August. The total dollar amount that LG Display will be purchasing from Samsung is US$4,200,000. And Samsung will be purchasing just US$3,160,000 worth. This isn’t exact science since a 17-inch wide LCD panel might have a slightly higher price compared to the squared one but it should show there will some difference in total sales generated by Samsung and LG Display with this deal. The more the two companies do business together the better off Samsung will be relative to LG Display. But maybe there is something else going on. Samsung might have manufactured too many 22-inch LCD panels while LG Display might have done the same thing with 17-inch wide LCD panels. And maybe Samsung will be giving LG Display a significant discount for taking 400,000 out of inventory.
LG Display has a single 17-inch LCD monitor panel: LM171WX3 with a 1440 x 900 resolution, 250 cd/m2 of brightness, 60-percent NTSC, 800:1 contrast ratio, 8ms response time and 160/160 viewing angles.
Personally, I am not in favor of government-induced business deals like this. If Samsung absolutely needs panels from LG Display the two companies will find a way to do business. If not, well, no business. That’s how it should be done. The government should stay out of brokering deals and instead concentrate on funding universities and research institutes so more engineers can develop the next-generation of displays and stay ahead of the game.
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I remember back when Windows 3.1 just came out. I was in high school and working on Windows 3.0–simply a GUI on top of DOS. Windows 3.0 was simply terrible and slowed everything down, kind of like Vista. I had to get Windows 3.1 so I together with a couple of my geeky friends, split the cost three ways and purchased Windows 3.1 from Egghead. I was happy with Windows 3.1: it was much faster, the graphics was cooler and all was good in Saratoga. Fast forward about 20 years.
Windows 7 is Microsoft’s fix to Vista. Vista is like Windows 3.0: it slows machines and makes the whole experience of using a computer less exciting. You feel like you’re getting less work done and more work trying to fix the PC to make it work better with Vista. At least that’s what I did for about six months. After failing I went back to Windows XP Pro SP3. Now Windows 7 is out and reviews are saying that it is much faster than Vista. That’s great. Engadget just posted up a review of Windows 7 RTM (Release To Manufacturing). The UI looks quite pretty (thanks to the interesting backgrounds they used) and there really are some great features: quick display switching, Aero snap and shake, etc. But what got me completely discouraged was this:
Our worst experiences, however, were with a clean install to a quite modern netbook. The OS became increasingly unstable over time — Windows Explorer itself seemed to be the main culprit — and the machine eventually failed to boot entirely. Luckily, the Startup Repair utility managed to jump to the rescue and found a System Restore point that booted fine, though we lost the few customizations we’d made up to that point and were face with basically a fresh install again. It was nice of Windows 7 to recover itself so well, but we would obviously have preferred to not run into that issue in the first place.
That means Windows 7 is still Windows where after a long time of using it the system slowly gets worse and worse. Remember after I ditched Vista I went back to XP. And soon after going back to XP I went full blown over to OS X. I want to say that I’ve never looked back but I did. I tried to use Office 2008 on the Mac and I must say that the Mac Business Unit at Microsoft really don’t know what they are doing: Excel for Mac really sucks guys. So I installed XP on top of Parallels to run Excel. You would think it would be slower, but it is actually faster, much faster, than running the Mac version of Excel.
Back to Windows 7: it’s faster and prettier than Vista and has several snazzy features. But it’s the old Windows that eventually die on you. The Mac mini that we have has been running without a cold reboot for months without showing any signs that it is slowing down and about to crawl to a halt. I’ve heard from a friend of mine that there is a guy who has a full-time job at Dell and his main responsibility is to go around all the Windows Servers and hard reboot them after a set number of hours. Truth or fiction, I don’t know.
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Up & Up According to the DisplaySearch Monthly TFT LCD Shipment Database, large-area TFT LCD panel shipments increased 5% M/M and 39% Y/Y to 49.2 million units, a monthly record. In step with unit shipments, revenues also increased 11% M/M and 6% Y/Y to US$5.9 billion.
LG Display On Top LG Display took 24.7% market share of unit shipments in July followed by Samsung with 23.4% and AU Optronics (AUO) with 16.8%. Based on area shipments Samsung took top honors with 26.8% share with LG Display following in second position with 25.1%. Chi Mei Optoelectronics (CMO) edged out AUO with a 15.7% share versus 15.6%. LG Display and Samsung combine for 28.1% of unit shipments and 51.9% of area shipments.
Notebook PC LCD panel unit shipments increased 14% M/M and 36% Y/Y to 16.7 million units. Notebook PCs have increasingly gained popularity over desktop PCs thanks to increased performance matching the needs of most PC users, portability, the proliferation of WiFi hotspots as well as 3G capabilities. Netbooks have been all the rage but if you look carefully enough there are plenty of fully equipped notebook PCs with large-enough LCDs for less than US$500. With students going back to school, the great majority of those purchasing new computers will be toting brand new notebook PCs instead of desktops.
LCD Monitor panel unit shipments decreased 1% M/M but increased 26% Y/Y to 17.9 million units. I am not sure why LCD monitor demand isn’t as strong but I’m going to throw some darts. Demand from the transition from CRT- to LCD-based monitors should be declining as penetration rates increase to more than 90%. Also, LCD monitors last considerably longer than notebook PCs, so replacement demand for LCD monitors has a long cycle. Productivity enhancements from multi-monitor setups are not easily grasped. I have seen many notebook PC users with an external LCD monitor but the LCD on the notebook PC is almost always turned off. Finally, smaller LCD TVs can easily be used as a monitor replacement.
LCD TV panel unit shipments increased 3% M/M and 69% Y/Y to 13.5 million units in July. I would have expected a stronger result as panel that are just now being shipped will be integrated into LCD TV sets and then distributed through retail channels for the upcoming shopping season. There is a fairly long supply chain for LCD TV sets especially when it is distributed to retailers within a region and then put up on shelves, connected and tuned for potential customers to see.
Forecast David Hsieh, VP of DisplaySearch stated that the strong results in July “… indicates strong recovery in end-market demand and increased utilization at panel makers… Despite the price increases, OEMs and brands are building inventories for the coming holiday season.” I hope David is right. But a strong recovery in end-market demand might not be the real reason why panel shipments are increasing. I think it is the expectation that end-market demand will recovery that is driving increased panel shipments right now. He mentions it himself that OEMs and brands are stocking up inventory. That expectation might not come to fruition.
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James Cameron will be collaborating with Panasonic to promote 3D TVs. James Cameron and Panasonic is expecting the new movie Avatar to be a success to catalyze 3D home theater. James Cameron on 3D:
I believe 3D is how we will experience movies, gaming and computing in the near future. 3D is not something you watch. It’s a reality you feel you could step into.
Panasonic’s GM Masayuki Kozuka agrees: “We went to get global interest rolling. For people to want to watch 3D at home, the movie has to be a blockbuster.” Panasonic’s 3D HDTVs will be arriving in 2010. The first prototypes were on 103-inch plasma TVs sporting a 1920 x 1080 resolution. You will need to wear 3D glasses to experience the effects on the plasma TVs.
On August 21, 2009 there were screenings at select 3D IMAX theaters showing an extended trailer of Avatar lasting 16 minutes. “This is a place where I can speak from the heart. I’m a fan of fantasy and science-fiction and other worlds, and it’s a privilege to unveil this sucker I’ve been working on for four years and dreaming of for 14. Even though my mind was trapped in Chippewa, my mind was travelling the galaxy thanks to Star Trek and 2001 Space Odyssey… when I was a kid, reading a science-fiction book a day on the bus. So this film is for that 14-year old boy in the back of my mind,” shared Cameron during Avatar Day. Cameron first envisioned the idea for Avatar while CEO of Digital Domain in the 1990s:
We were lagging behind in 3D technology, so I wanted to create a film that would push the art of CG. When I got the script out again four years ago, I thought it was timely because of the environmental situation. But we had to develop the performance technology to live up to what the actors could do.
For two years, Cameron developed the Na’vi language with the help of University of Southern California linguists. The actors and actresses had to learn a brand new language for the Avatar film.
According to Wikipedia, James Cameron’s “directorial efforts have grossed approximately US$1.1 billion domestically…” That’s a lot of movies that Cameron has directed and some of them have been very successful. Aliens
and Titanic
(link to Amazon) come to mind. He is also the co-developer of the digital 3D Fusion Camera System commercialized by Sony. Cameron and Vince Pace developed this system to shoot film in stereoscopic 3D. This system was used on Cameron’s Aliens of the Deep
and Ghosts of the Abyss
(link to Amazon).
Cameron will be extensively using the 3D Fusion Camera System to film his next movie Avatar (link to official movie site), which has been in the works for about three years. The story is simply stated as: “On the distant moon Pandora, a reluctant hero embarks on a journey of redemption and discovery as he leads a heroic battle to save a civilization.” The protagonist, Jake (played by Sam Worthington), is a paraplegic soldier without any hopes to serve in the army. He hopes to join the ‘Avatar’ program where his consciousness is transferred into the body of Na’vi to infiltrate and learn about the Na’vi race, who are 10-feet tall, blue skinned with elf-like ears. A group of soldiers with Na’vi bodies, simply called avatars, infiltrate Pandora but Jake gets separated from the group. While assimilating Jake meets Natiri (played by Zoe Saldana), a Na’vi princess, and falls in love.
3D is certainly going to get a massive boost thanks to Avatar. The experience of watching Avatar on a massive 3D IMAX will certainly be exciting. I plan to watch it the day it comes out. But will that excitement transfer back into the home and lead us to buy very expensive 3D HDTVs (that are significantly smaller than IMAX screens) to watch just a select few titles that are available? And those 3D glasses…
Ubisoft will be coming out with “Avatar, The Game” on November 24, 2009. You can play as a Na’vi, Pandora’s indigenous people, with bows and arrows or as humans representing the RDA Corporation with high-tech gear. I wonder if the game will be in 3D?
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Engadget: The Dell U2410 is a 24-inch LCD monitor sporting an IPS LCD panel. IPS stands for In-Plane Switching and is generally regarded as a very high-end wide viewing-angle LCD technology that produces very nice colors and exhibits low contrast shifts and color shifts when viewing at wide angles. A lot of professionals use IPS or PVA-based LCD monitors (some still use CRT due to its brilliant color rendering).
The U2410 sports a color gamut of 96-percent Adobe RGB and 100-percent sRGB–great for professionals who need to deal with color. How did Dell do this? Probably by incorporating an IPS LCD panel that uses a Wide Color Gamut CCFL (WCG-CCFL) backlight. WCG-CCFL backlights differ from normal CCFL backlights in that the phosphors inside the CCFL tube have been enhanced to emit light that brings about a wider spectrum of colors.
Since Dell is positioning the U2410 as a high-end LCD monitor for color professionals the resolution remains 1920×1200 with a 16:10 aspect ratio; not the 16:9 1920×1080 that you see on monitors that are geared more toward consumers. I personally lie the additional 120 vertical display real estate. Contrast ratio is a solid 1000:1 and you can expect that not to collapse when viewing at angles.
Connectivity includes DVI, HDMI and DisplayPort. I wish the industry would simply come together on a single standard so we don’t go wasting our precious and hard-earned money buying expensive cables every time another “standard” comes out. The U2410 also comes with a 4-port USB hub. The price is on the high side but not incredibly so: JPY72,450 or about US$760.
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