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AN ECONOMIC ANALYSIS ON LCD TELEVISION

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Submitted to: Ms. Shikha Singh

Submitted By

Sushant Aneja

Acknowledgments

We would like to express our deep gratitude to Professor- Ms. Shikha Singh for her patient guidance, enthusiastic encouragement and useful critiques on this project work. We would also like to thank our professor for her advice and assistance in framing the questionnaires as well as keeping our progress on schedule. We would also like to extend our thanks to all the participants for their sincere response in survey without whom project would not have been completed.
Finally, we like to thank our classmates for their support and encouragement throughout our study.

With Best Regards

Introduction
LCD televisions produce a black and colored image by selectively filtering a white light. The light is typically provided by a series of cold cathode fluorescent lamps (CCFLs) at the back of the screen, although some displays use white or colored LEDs instead. Millions of individual LCD shutters arranged in a grid, open and close to allow a metered amount of the white light through. Each shutter is paired with a colored filter to remove all but the red, green or blue (RGB) portion of the light from the original white source. Each shutter–filter pair forms a single sub-pixel. The sub-pixels are so small that when the display is viewed from even a short distance, the individual colors blend together to produce a single spot of color, a pixel. The shade of color is controlled by changing the relative intensity of the light passing through the sub-pixels.
Liquid crystals encompass a wide range of (typically) rod-shaped polymers that naturally form into thin, ordered layers, as opposed to the more random alignment of a normal liquid. Some of these, the nematic liquid crystals, also show an alignment effect between the layers. The particular direction of the alignment of a nematic liquid crystal can be set by placing it in contact with an alignment layer or director, which is essentially a material with microscopic grooves in it, on the supporting substrates. When placed on a director, the layer in contact will align itself with the grooves, and the layers above will subsequently align themselves with the layers below, the bulk material taking on the director's alignment. In the case of a Twisted Nematic (TN) LCD, this effect is utilized by using two directors arranged at right angles and placed close together with the liquid crystal between them. This forces the layers to align themselves in two directions, creating a twisted structure with each layer aligned at a slightly different angle to the ones on either side.
LCD shutters consist of a stack of three primary elements. On the bottom and top of the shutter are polarizer plates set at right angles. Normally light cannot travel through a pair of polarizers arranged in this fashion, and the display would be black. The polarizers also carry the directors to create the twisted structure aligned with the polarizers on either side. As the light flows out of the rear polarizer, it will naturally follow the liquid crystal's twist, exiting the front of the liquid crystal having been rotated through the correct angle, that allows it to pass through the front polarizer. LCDs are normally transparent in this mode of operation.
To turn a shutter off, a voltage is applied across it from front to back. The rod-shaped molecules align themselves with the electric field instead of the directors, distorting the twisted structure. The light no longer changes polarization as it flows through the liquid crystal, and can no longer pass through the front polarizer. By controlling the voltage applied across the liquid crystal, the amount of remaining twist can be selected. This allows the transparency of the shutter to be controlled. To improve switching time, the cells are placed under pressure, which increases the force to re-align themselves with the directors when the field is turned off.
Several other variations and modifications have been used in order to improve performance in certain applications. In-Plane Switching displays (IPS and S-IPS) offer wider viewing angles and better color reproduction, but are more difficult to construct and have slightly slower response times. IPS displays are used primarily for computer monitors. Vertical Alignment (VA, S-PVA and MVA) offer higher contrast ratios and good response times, but suffer from color shifting when viewed from the side. In general, all of these displays work in a similar fashion by controlling the polarization of the light source.

Addressing sub-pixels

A close-up (300×) view of a typical LCD display, clearly showing the sub-pixel structure. The "notch" at the lower left of each sub-pixel is the thin-film transistor. The associated capacitors and addressing lines are located around the shutter, in the dark areas.

In order to address a single shutter on the display, a series of electrodes is deposited on the plates on either side of the liquid crystal. One side has horizontal stripes that form rows, the other has vertical stripes that form columns. By supplying voltage to one row and one column, a field will be generated at the point where they cross. Since a metal electrode would be opaque, LCDs use electrodes made of a transparent conductor, typically indium tin oxide.
Since addressing a single shutter requires power to be supplied to an entire row and column, some of the field always leaks out into the surrounding shutters. Liquid crystals are quite sensitive, and even small amounts of leaked field will cause some level of switching to occur. This partial switching of the surrounding shutters blurs the resulting image. Another problem in early LCD systems was the voltages needed to set the shutters to a particular twist was very low, but that voltage was too low to make the crystals re-align with reasonable performance. This resulted in slow response times and led to easily visible "ghosting" on these displays on fast-moving images, like a mouse cursor on a computer screen. Even scrolling text often rendered as an unreadable blur, and the switching speed was far too slow to use as a useful television display.
In order to attack these problems, modern LCDs use an active matrix design. Instead of powering both electrodes, one set, typically the front, is attached to a common ground. On the rear, each shutter is paired with a thin-film transistor that switches on in response to widely separated voltage levels, say 0 and +5 volts. A new addressing line, the gate line, is added as a separate switch for the transistors. The rows and columns are addressed as before, but the transistors ensure that only the single shutter at the crossing point is addressed; any leaked field is too small to switch the surrounding transistors. When switched on, a constant and relatively high amount of charge flows from the source line through the transistor and into an associated capacitor. The capacitor is charged up until it holds the correct control voltage, slowly leaking this through the crystal to the common ground. The current is very fast and not suitable for fine control of the resulting store charge, so pulse code modulation is used to accurately control the overall flow. Not only does this allow for very accurate control over the shutters, since the capacitor can be filled or drained quickly, but the response time of the shutter is dramatically improved as well.
Building a display
A typical shutter assembly consists of a sandwich of several layers deposited on two thin glass sheets forming the front and back of the display. For smaller display sizes (under 30 inches), the glass sheets can be replaced with plastic.
The rear sheet starts with a polarizing film, the glass sheet, the active matrix components and addressing electrodes, and then the director. The front sheet is similar, but lacks the active matrix components, replacing those with the patterned color filters. Using a multi-step construction process, both sheets can be produced on the same assembly line. The liquid crystal is placed between the two sheets in a patterned plastic sheet that divides the liquid into individual shutters and keeps the sheets at a precise distance from each other.
The critical step in the manufacturing process is the deposition of the active matrix components. These have a relatively high failure rate, which renders those pixels on the screen "always on". If there are enough broken pixels, the screen has to be discarded. The number of discarded panels has a strong effect on the price of the resulting television sets, and the major downward fall in pricing between 2006 and 2008 was due mostly to improved processes.
To produce a complete television, the shutter assembly is combined with control electronics and backlight. The backlight for small sets can be provided by a single lamp using a diffuser or frosted mirror to spread out the light, but for larger displays a single lamp is not bright enough and the rear surface is instead covered with a number of separate lamps. Achieving even lighting over the front of an entire display remains a challenge, and bright and dark spots are not uncommon.

[edit] Comparison

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Packaging

In a CRT the electron beam is produced by heating a metal filament, which "boils" electrons off its surface. The electrons are then accelerated and focused in an electron gun, and aimed at the proper location on the screen using electromagnets. The majority of the power budget of a CRT goes into heating the filament, which is why the back of a CRT-based television is hot. Since the electrons are easily deflected by gas molecules, the entire tube has to be held in vacuum. The atmospheric force on the front face of the tube grows with the area, which requires ever-thicker glass. This limits practical CRTs to sizes around 30 inches; displays up to 40 inches were produced but weighed several hundred pounds, and televisions larger than this had to turn to other technologies like rear-projection.
The lack of vacuum in an LCD television is one of its advantages; there is a small amount of vacuum in sets using CCFL backlights, but this is arranged in cylinders which are naturally stronger than large flat plates. Removing the need for heavy glass faces allows LCDs to be much lighter than other technologies. For instance, the Sharp LC-42D65, a fairly typical 42-inch LCD television, weighs 55 lbs including a stand,[1] while the late-model Sony KV-40XBR800, a 40" 4:3 CRT weighs a massive 304 lbs without a stand, almost six times the weight.[2]
LCD panels, like other flat panel displays, are also much thinner than CRTs. Since the CRT can only bend the electron beam through a critical angle while still maintaining focus, the electron gun has to be located some distance from the front face of the television. In early sets from the 1950s the angle was often as small as 35 degrees off-axis, but improvements, especially computer assisted convergence, allowed that to be dramatically improved and, late in their evolution, folded. Nevertheless, even the best CRTs are much deeper than an LCD; the KV-40XBR800 is 26 inches deep,[2] while the LC-42D65U is less than 4 inches thick[1] – its stand is much deeper than the screen in order to provide stability.
LCDs can, in theory, be built at any size, with production yields being the primary constraint. As yields increased, common LCD screen sizes grew, from 14 to 30", to 42", then 52", and 65" sets are now widely available. This allowed LCDs to compete directly with most in-home projection television sets, and in comparison to those technologies direct-view LCDs have a better image quality. Experimental and limited run sets are available with sizes over 100 inches.

Efficiency

LCDs are relatively inefficient in terms of power use per display size, because the vast majority of light that is being produced at the back of the screen is blocked before it reaches the viewer. To start with, the rear polarizer filters out over half of the original un-polarized light. Examining the image above, you can see that a good portion of the screen area is covered by the cell structure around the shutters, which removes another portion. After that, each sub-pixel's color filter removes the majority of what is left to leave only the desired color. Finally, to control the color and luminance of a pixel as a whole, the light has to be further absorbed in the shutters.
For these reasons the backlighting system has to be extremely powerful. In spite of using highly efficient CCFLs, most sets use several hundred watts of power, more than would be required to light an entire house with the same technology. As a result, LCD televisions end up with overall power usage similar to a CRT of the same size. Using the same examples, the KV-40XBR800 dissipates 245 W,[2] while the LC-42D65 dissipates 235 W.[1] Plasma displays are worse; the best are on par with LCDs, but typical sets draw much more.[3]
Modern LCD sets have attempted to address the power use through a process known as "dynamic lighting" (originally introduced for other reasons, see below). This system examines the image to find areas that are darker, and reduces the backlighting in those areas. CCFLs are long cylinders that run the length of the screen, so this change can only be used to control the brightness of the screen as a whole, or at least wide horizontal bands of it. This makes the technique suitable only for particular types of images, like the credits at the end of a movie. In 2009 some manufacturers[4] made some TVs using HCFL (more power efficient than CCFL). Sets using LEDs are more distributed, with each LED lighting only a small number of pixels, typically a 16 by 16 patch. This allows them to dynamically adjust brightness of much smaller areas, which is suitable for a much wider set of images.
Another ongoing area of research is to use materials that optically route light in order to re-use as much of the signal as possible. One potential improvement is to use microprisms or dichromic mirrors to split the light into R, G and B, instead of absorbing the unwanted colors in a filter. A successful system would improve efficiency by three times. Another would be to direct the light that would normally fall on opaque elements back into the transparent portion of the shutters.
Several newer technologies, OLED, FED and SED, have lower power use as one of their primary advantages. All of these technologies directly produce light on a sub-pixel basis, and use only as much power as that light level requires. Sony has demonstrated 36" FED units displaying very bright images drawing only 14 W, less than 1/10 as much as a similarly sized LCD. OLEDs and SEDs are similar to FEDs in power terms. The dramatically lower power requirements make these technologies particularly interesting in low-power uses like laptop computers and mobile phones. These sorts of devices were the market that originally bootstrapped LCD technology, due to its light weight and thinness.

Image quality

A traveler pocket-size LCD TV

Early LCD sets were widely derided for their poor overall image quality, most notably the ghosting on fast-moving images, poor contrast ratio, and muddy colors. In spite of many predictions that other technologies would always beat LCDs, massive investment in LCD production, manufacturing, and electronic image processing has addressed many of these concerns.

Response time

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For 60 frames per second video, common in North America, each pixel is lit for 17 ms before it has to be re-drawn (20 ms in Europe). Early LCD displays had response times on the order of hundreds of milliseconds, which made them useless for television. A combination of improvements in materials technology since the 1970s greatly improved this, as did the active matrix techniques. By 2000, LCD panels with response times around 20 ms were relatively common in computer roles. This was still not fast enough for television use.
A major improvement, pioneered by NEC, led to the first practical LCD televisions. NEC noticed that liquid crystals take some time to start moving into their new orientation, but stop rapidly. If the initial movement could be accelerated, the overall performance would be increased. NEC's solution was to boost the voltage during the "spin up period" when the capacitor is initially being charged, and then dropping back to normal levels to fill it to the required voltage. A common method is to double the voltage, but halve the pulse width, delivering the same total amount of power. Named "Overdrive" by NEC, the technique is now widely used on almost all LCDs.
Another major improvement in response time was achieved by adding memory to hold the contents of the display – something that a television needs to do anyway, but was not originally required in the computer monitor role that bootstrapped the LCD industry. In older displays the active matrix capacitors were first drained, and then recharged to the new value with every refresh. But in most cases, the vast majority of the screen's image does not change from frame to frame. By holding the before and after values in computer memory, comparing them, and only resetting those sub-pixels that actually changed, the amount of time spent charging and discharging the capacitors was reduced. Moreover the capacitors are not drained completely; instead, their existing charge level is either increased or decreased to match the new value, which typically requires fewer charging pulses. This change, which was isolated to the driver electronics and inexpensive to implement, improved response times by about two times.
Together, along with continued improvements in the liquid crystals themselves, and by increasing refresh rates from 60 Hz to 120 and 240 Hz, response times fell from 20 ms in 2000 to about 2 ms in the best modern displays. But even this is not really fast enough because the pixel will still be switching while the frame is being displayed. Conventional CRTs are well under 1 ms, and plasma and OLED displays boast times on the order of 0.001 ms.
One way to further improve the effective refresh rate is to use "super-sampling", and it is becoming increasingly common on high-end sets. Since the blurring of the motion occurs during the transition from one state to another, this can be reduced by doubling the refresh rate of the LCD panel, and building intermediate frames using various motion compensation techniques. This smooths out the transitions, and means the backlighting is turned on only when the transitions are settled. A number of high-end sets offer 120 Hz (in North America) or 100 Hz (in Europe) refresh rates using this technique. Another solution is to only turn the backlighting on once the shutter has fully switched. In order to ensure that the display does not flicker, these systems fire the backlighting several times per refresh, in a fashion similar to movie projection where the shutter opens and closes several times per frame.

Contrast ratio

Even in a fully switched-off state, liquid crystals allow some light to leak through the shutters. This limits their contrast ratios to about 1600:1 on the best modern sets, when measured using the ANSI measurement (ANSI IT7.215-1992). Manufacturers often quote the "Full On/Off" contrast ratio instead, which is about 25% greater for any given set.[5]
This lack of contrast is most noticeable in darker scenes. To display a color close to black, the LCD shutters have to be turned to almost full opacity, limiting the number of discrete colors they can display. This leads to "posterizing" effects and bands of discrete colors that become visible in shadows, which is why many reviews of LCD TVs mention the "shadow detail".[6] In comparison, the highest-end LED TVs offer regular contrast ratios of 5,000,000:1.
Since the total amount of light reaching the viewer is a combination of the backlighting and shuttering, modern sets can use "dynamic backlighting" to improve the contrast ratio and shadow detail. If a particular area of the screen is dark, a conventional set will have to set its shutters close to opaque to cut down the light. However, if the backlighting is reduced by half in that area, the shuttering can be reduced by half, and the number of available shuttering levels in the sub-pixels doubles. This is the main reason high-end sets offer dynamic lighting (as opposed to power savings, mentioned earlier), allowing the contrast ratio across the screen to be dramatically improved. While the LCD shutters are capable of producing about 1000:1 contrast ratio, by adding 30 levels of dynamic backlighting this is improved to 30,000:1.
However, the area of the screen that can be dynamically adjusted is a function of the backlighting source. CCFLs are thin tubes that light up many rows (or columns) across the entire screen at once, and that light is spread out with diffusers. The CCFL must be driven with enough power to light the brightest area of the portion of the image in front of it, so if the image is light on one side and dark on the other, this technique cannot be used successfully. Displays backlit by full arrays of LEDs have an advantage, because each LED lights only a small patch of the screen. This allows the dynamic backlighting to be used on a much wider variety of images. Edge-lit displays do not enjoy this advantage. These displays have LEDs only along the edges and use a light guide plate covered with thousands of convex bumps that reflect light from the side-firing LEDs out through the LCD matrix and filters. LEDs on edge-lit displays can be dimmed only globally, not individually.
The massive on-paper boost this method provides is the reason many sets now place the "dynamic contrast ratio" in their specifications sheets. There is widespread debate in the audio-visual world as to whether or not dynamic contrast ratios are real, or simply marketing speak.[7][8] Reviewers commonly note that even the best LCD displays cannot match the contrast ratios or deep blacks of plasma displays, in spite of being rated, on paper, as having much higher ratios.

Color gamut

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Color on an LCD television is produced by filtering down a white source and then selectively shuttering the three primary colors relative to each other. The accuracy and quality of the resulting colors are thus dependent on the backlighting source and its ability to evenly produce white light. The CCFLs used in early LCD televisions were not particularly white, and tended to be strongest in greens. Modern backlighting has improved this, and sets commonly quote a color space covering about 75% of the NTSC 1953 color gamut. Using white LEDs as the backlight improves this further.
In September 2009 Nanoco Group announced that it had signed a joint development agreement with a major Japanese electronics company under which it will design and develop quantum dots for use in LED backlights in LCD televisions.[9] Quantum dots are valued for displays, because they emit light in very specific Gaussian distributions. This can result in a display that more accurately renders the colors that the human eye can perceive. Quantum dots also require very little power since they are not color filtered.

History

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An LCD TV hanging on a wall in the Taipei World Trade Center during the Computex Taipei show in 2008.

Early efforts

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Passive matrix LCDs first became common in the 1980s for various portable computer roles. At the time they competed with plasma displays in the same market space. The LCDs had very slow refresh rates that blurred the screen even with scrolling text, but their light weight and low cost were major benefits. Screens using reflective LCDs required no internal light source, making them particularly well suited to laptop computers.
Refresh rates of early devices were too slow to be useful for television. Portable televisions were a target application for LCDs. LCDs consumed far less battery power then even the miniature tubes used in portable televisions of the era. The earliest commercially made LCD TV was the Casio TV-10 made in 1983.[10] Resolutions were limited to standard definition, although a number of technologies were pushing displays towards the limits of that standard; Super VHS offered improved color saturation, and DVDs added higher resolutions as well. Even with these advances, screen sizes over 30" were rare as these formats would start to appear blocky at normal seating distances when viewed on larger screens. Projection systems were generally limited to situations where the image had to be viewed by a larger audience.
Nevertheless, some experimentation with LCD televisions took place during this period. In 1988, Sharp Corporation introduced the first commercial LCD television, a 14" model. These were offered primarily as boutique items for discerning customers, and were not aimed at the general market. At the same time, plasma displays could easily offer the performance needed to make a high quality display, but suffered from low brightness and very high power consumption. However, a series of advances led to plasma displays outpacing LCDs in performance improvements, starting with Fujitsu's improved construction techniques in 1979, Hitachi's improved phosphors in 1984, and AT&T's elimination of the black areas between the sub-pixels in the mid-1980s. By the late 1980s, plasma displays were far in advance of LCDs.

High-definition

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It was the slow standardization of high definition television that first produced a market for new television technologies. In particular, the wider 16:9 aspect ratio of the new material was difficult to build using CRTs; ideally a CRT should be perfectly circular in order to best contain its internal vacuum, and as the aspect ratio becomes more rectangular it becomes more difficult to make the tubes. At the same time, the much higher resolutions these new formats offered were lost at smaller screen sizes, so CRTs faced the twin problems of becoming larger and more rectangular at the same time. LCDs of the era were still not able to cope with fast-moving images, especially at higher resolutions, and from the mid-1990s the plasma display was the only real offering in the high resolution space.
Through the halting introduction of HDTV in the mid-1990s into the early 2000s, plasma displays were the primary high-definition display technology. However, their high cost, both manufacturing and on the street, meant that older technologies like CRTs maintained a footprint in spite of their disadvantages. LCD, however, was widely considered to be unable to scale into the same space, and it was widely believed that the move to high-definition would push it from the market entirely.
This situation changed rapidly. Contrary to early optimism, plasma displays never saw the massive economies of scale that were expected, and remained expensive. Meanwhile, LCD technologies like Overdrive started to address their ability to work at television speeds. Initially produced at smaller sizes, fitting into the low-end space that plasmas could not fill, LCDs started to experience the economies of scale that plasmas failed to achieve. By 2004, 32" models were widely available, 42" sets were becoming common, and much larger prototypes were being demonstrated.

takeover

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LCD TV for public viewing in a Hong Kong bus

Although plasmas continued to hold an arguable picture quality edge over LCDs, and even a price advantage for sets at the critical 42" size and larger, LCD prices started falling rapidly in 2006 while their screen sizes were increasing at a similarly rapid rate. By late 2006, several vendors were offering 42" LCDs, albeit at a price premium, encroaching on plasma's only stronghold. More critically, LCDs offer higher resolutions and true 1080p support, while plasmas were stuck at 720p, which made up for the price difference.
Predictions that prices for LCDs would drop rapidly through 2007 led to a "wait and see" attitude in the market, and sales of all large-screen televisions stagnated while customers watched to see if this would happen. Plasmas and LCDs reached price parity in 2007, at which point the LCD's higher resolution was a winning point for many sales. By late 2007, it was clear that LCDs were going to outsell plasmas during the critical Christmas sales season. This was in spite of the fact that plasmas continued to hold an image quality advantage, but as the president of Chunghwa Picture Tubes noted after shutting down their plasma production line, "Globally, so many companies, so many investments, so many people have been working in this area, on this product. So they can improve so quickly."
When the sales figures for the 2007 Christmas season were finally tallied, pundits were surprised to find that LCDs had not only outsold plasma, but also outsold CRTs during the same period. This evolution drove competing large-screen systems from the market almost overnight. Plasma had overtaken rear-projection systems in 2005. The same was true for CRTs, which lasted only a few months longer; Sony ended sales of their famous Trinitron in most markets in 2007, and shut down the final plant in March 2008. The February 2009 announcement that Pioneer Electronics was ending production of the plasma screens was widely considered the tipping point in that technology's history as well.
LCD's dominance in the television market accelerated rapidly. It was the only technology that could scale both up and down in size, covering both the high-end market for large screens in the 40 to 50" class, as well as customers looking to replace their existing smaller CRT sets in the 14 to 30" range. Building across these wide scales quickly pushed the prices down across the board.
In 2008, LCD TV shipments were up 33 percent year-on-year compared to 2007 to 105 million units. In 2009, LCD TV shipments raised to 146 million units (69% from the total of 211 million TV shipments). In 2010, LCD TV shipments reached 187.9 million units (from an estimated total of 247 million TV shipments).
Current sixth-generation panels by major manufacturers such as Sony, Sharp Corporation, LG Display, Panasonic and Samsung have announced larger sized models: • In October 2004, Sharp announced the successful manufacture of a 65" panel. • In March 2005, Samsung announced an 82" LCD panel. • In August 2006, LG Display Consumer Electronics announced a 100" LCD television • In January 2007, Sharp displayed a 108" LCD panel under the AQUOS brand name at CES in Las Vegas.

Recent research

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Some manufacturers are also experimenting with extending color reproduction of LCD televisions. Although current LCD panels are able to deliver all sRGB colors using an appropriate combination of backlight's spectrum and optical filters, manufacturers want to display even more colors. One of the approaches is to use a fourth, or even fifth and sixth color in the optical color filter array. Another approach is to use two sets of suitably narrowband backlights (e.g. LEDs), with slightly differing colors, in combination with broadband optical filters in the panel, and alternating backlights each consecutive frame. Fully using the extended color gamut will naturally require an appropriately captured material and some modifications to the distribution channel. Otherwise, the only use of the extra colors would be to let the looker boost the color saturation of the TV picture beyond what was intended by the producer, but avoiding the otherwise unavoidable loss of detail ("burnout") in saturated areas.

Competing systems

In spite of LCD's current dominance of the television field, there are several other technologies being developed that address its shortcomings. Whereas LCDs produce an image by selectively blocking a backlight OLED, FED and SED all produce light directly on the front face of the display. In comparison to LCDs, all of these technologies offer better viewing angles, much higher brightness and contrast ratio (as much as 5,000,000:1), and better color saturation and accuracy, and use less than 1/10 as much power. In theory, they are less complex and less expensive to build.
Actually manufacturing these screens has proved more difficult than originally imagined. Sony abandoned their FED project in March 2009, but continue work on their OLED sets. Canon continues development of their SED technology, but announced that they will not attempt to introduce sets to market for the foreseeable future.
Samsung has been displaying OLED sets at 14.1, 31 and 40 inch sizes for some time, and at the SID 2009 trade show in San Antonio they announced that the 14.1 and 31 inch sets are "production ready".

Facing Slower Growth and Increasing Complexity in Product Mix, LCD TV Brands Fight for Share

Posted by Deborah Yang in DisplaySearch, TVs on February 14, 2013 | 2 comments
Entering the slow season, the aggregate production of LCD TV brands surveyed for our MarketWise – LCD Industry Dynamics report declined 14% M/M in December 2012, and is expected to fall in January and February before recovering somewhat in March and April, for a drop of 24% Q/Q in Q1’13.

TV makers are taking advantage of loose supply in Q1 to negotiate lower panel prices. At the same time, they are concerned about availability of TV panels in early Q2, when they launch most new models. They are also concerned about the supply of different sizes (32”, 40”/42”, and 39”/50”) and specifications, such as LED, during the 2H’13 busy season. The fact that a mature market like TV is moving toward size proliferation has confused TV makers.

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Source: MarketWise – LCD Industry Dynamics – January 2013

Samsung, LGE and most Chinese TV brands have bullish LCD TV shipment targets, and corresponding panel procurement plans, despite the rather modest TV market growth this year forecast in our Quarterly LCD TV Value Chain report. Samsung and LGE plan to achieve this goal by taking share from Japanese TV brands.

Industry-wide production of 32” panels is forecast to drop sharply in 2013, and TV makers are very concerned about the mismatch in TV panel supply/demand. TV makers, including Chinese brands, can’t make a profit on 32” ‘fighter’ models, yet in order to secure panel allocation they are facing higher prices. In 2013, the supply of 32″ will clearly fall short of demand unless TV makers can shift some demand from 32”, which has been the main size for years, to larger sizes. Panel makers will strongly push for such a migration.

Samsung and LGE are adjusting their TV size portfolio to better match the drastic changes in panel supply this year; the share of 32” in their 2013 shipments will fall by 5% and 7%, respectively, with the volume moving to larger sizes. It is worth watching to see whether other TV brands will do the same thing. This may drive the upgrade cycle to larger sizes, though the lower prices required might make it at the expense of profitability for players along the supply chain.

Meanwhile, there will be a clear transition to LED models this year. The fast adoption of low-cost direct LED-backlit LCD TVs is worth noting. Samsung and LGE are significantly upsizing their plans for direct LED-backlit LCD TVs in 2013. In Samsung’s 2013 plan, 95%+ is LED, of which 80% is direct LED, segmented by bezel thickness. LGE is also increasing its plans for direct LED-backlit LCD TVs, at 50% of its total LCD TVs for 2013. While penetration of direct LED backlit LCD TVs has been low in Japan, it is increasing due to adoption from brands like Sony and Toshiba, with more coming in 2013. The adoption in China increased remarkably, with a growing number of makers participating in the low-cost direct LED TV market.

The LED Industry: Innovations, processes, technologies, trends and penetration

This report analyzes the entire LED industry from sub-materials analyses to trends in backlight units and general lighting. It provides forecasts for LED penetration, manufacturing processes and equipment technology, LED applications, product roadmaps, supply chain relationships and more. Use this report to o Identify current and future technologies to optimize designs for product applications and specifications: Ingot, Sapphire substrate, phosphor, lead frame and more o Gain insight into LED penetration with forecasts out to 2017 o Identify opportunities to lower costs with the right process and technology combinations o Track competitive product roadmaps, positioning and strategies

An industry standard for global TV market research

This report covers the entire range of TV products shipped worldwide and regionally. Offering the industry’s most comprehensive coverage of the TV market, our global team of industry experts analyzes historical shipments and forecast projections to deliver the most detailed information and insights available. Use this report to o Analyze market share, product mix and forecast by • Technology • Size • Format • Frame rate (advanced version) • Backlight type (advanced version) • 3D (advanced version coming Q1’2011 o Track technology penetration, including LCD, PDP, OLED, CRT and RP TVs LED backlight type and frame rate (advanced version) 3D (advanced version coming Q1’2011) Formulate product and pricing strategies with revenues, revenue shares and average selling prices o Analyze plasma and LCD panel shipments, supply and forecasts (optional upgrade) o Follow different markets with unmatched regional coverage (eight regions) o Understand current economic risks, opportunities and key considerations o Gain insight into specific technologies, applications and go-to-market strategies o Assess the potential of new trends, applications and markets o Get expert analysis on technologies, prices, regions, brands, outlooks, supply chain considerations, results vs. forecasts and more

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Forecasting Of LED TV:

LCD TVs remain the only growing TV technology, as LCD continues to take market share from both CRT and plasma technologies. LCD TVs are expected to account for about 88% of total TV shipments worldwide in 2012, up from 82% the year before, and are projected to peak around 97% of overall unit demand in 2015. Plasma TV shipments on the other hand will fall to about 5%, declining 26% Y/Y as pricing becomes uncompetitive at key sizes.
The share of LED-backlit LCD TVs is increase to 69% in 2012, compared to just 45% in 2011. The primary reason for the growth in share is the introduction of low-cost direct-LED backlight models that can be priced at a very small premium over CCFL backlit models. Direct-lit LED LCD TVs are bulkier than thin edge-lit models, but the lower cost will help move the market away from CCFL. Several governments, like China, are encouraging the purchase of these more energy efficient models.

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LCD TV Panel Supply/Demand Size Mismatch

The LCD TV panel market continues to be tight due to new process technologies, capacity conversions, a strong Chinese market, and average size growth. New sizes like 39”, 50”, 58”, 60”, and 65” were successful in 2012, and some sizes are becoming main stream with wide adoption and volume growth.

Looking toward 2013, established sizes (e.g. 26”, 32”, 37”, 40”/42”, 46”/47”, and 55”) will give way to new sizes as the TV brands adjust their product mix. In the latest NPD Display Search Quarterly LCD TV Value Chain Report, we compared the 2013 panel product mix of all panel suppliers to the LCD TV size mix in the Quarterly. As the figure below shows, we found that there are great differences between the panel suppliers and buyers.

Plans for LCD TV Set and Panel Size Mix

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Panel makers want to maximize the efficiency of each fab generation, while the TV brands want to maximize market share and revenue. As a result, their goals do not match perfectly all the time. And now, as panel makers aggressively expand into new sizes, the mismatch is growing more serious. When the market is tight, the push from panel makers is usually stronger than the pull from LCD TV brands. Many LCD TV brands will have to adjust their product mixes accordingly.

There are numerous factors affecting the size mismatch:

• To pursue the highest capacity utilization and value, panel makers have been moving faster to larger sizes than LCD TV brands, especially for 46”, 47”, 50”, 55”, 58”, 60”, and above.

• The very low priced 60” has changed the ecosystem. Some Chinese TV brands introduced 58” to compete with 60”. Samsung and LG Display are producing more 60” to compete with Sharp and Vizio. Since Gen 8 is not optimized for 60”, panel makers are using “multi-model glass” in which they make 60” and 32” panels on the same substrate.

• Almost all panel makers in Taiwan, Japan, and Korea are planning to reduce their 32” production in 2013. The tightness of 32” gives Chinese panel makers a great opportunity to obtain design wins with international brands.

• To prepare for the possible replacement of 46”/47” with 50”, most TV brands that are selling 46”/47” are using 50” panels. These include Panasonic, Philips, Samsung, Sony, Toshiba, Vizio, LG Electronics, and Chinese brands.

• The lack of Gen 7, especially in China, is creating a shortage of 40”/42”. Panel makers like AUO, LG Display, are planning to produce more 42” in Gen 8.

• Many TV brands are adjusting their product mix for 2013. Samsung’s strong dominance enables it to add every new size to its product line. Toshiba recently shifted from current mainstream sizes like 40”, 46”, and 55” to new sizes like 39”, 50”, and 58”. Sony is considering 42” and 39” to avoid concentrating too much on 40”. TV brands in China are coping with a complicated Chinese TV market since Chinese consumers tend to go for new products.

Barriers in Demand/Supply of LED TV in India:

1. Facing Slower Growth : Entering the slow season, the aggregate production of LCD TV brands surveyed for our Market Wise – LCD Industry Dynamics report declined 14% M/M in December 2012, and is expected to fall in January and February before recovering somewhat in March and April, for a drop of 24% Q/Q in Q1’13.

2. Increasing Complexity in Product Mix: Samsung, LG and most Chinese TV brands have bullish LCD TV shipment targets, and corresponding panel procurement plans, despite the rather modest TV market growth this year forecast in our Quarterly LCD TV Value Chain report. Samsung and LG plan to achieve this goal by taking share from Japanese TV brands.

Meanwhile, there will be a clear transition to LED models this year. The fast adoption of low-cost direct LED-backlit LCD TVs is worth noting. Samsung and LG are significantly upsizing their plans for direct LED-backlit LCD TVs in 2013. In Samsung’s 2013 plan, 95%+ is LED, of which 80% is direct LED, segmented by bezel thickness. LG is also increasing its plans for direct LED-backlit LCD TVs, at 50% of its total LCD TVs for 2013. While penetration of direct LED backlit LCD TVs has been low in Japan, it is increasing due to adoption from brands like Sony and Toshiba, with more coming in 2013. The adoption in China increased remarkably, with a growing number of makers participating in the low-cost direct LED TV market.

3. LCD TV Brands Fight for Share:

Industry-wide production of 32” panels is forecast to drop sharply in 2013, and TV makers are very concerned about the mismatch in TV panel supply/demand. TV makers, including Chinese brands, can’t make a profit on 32” ‘fighter’ models; yet in order to secure panel allocation they are facing higher prices. In 2013, the supply of 32″ will clearly fall short of demand unless TV makers can shift some demand from 32”, which has been the main size for years, to larger sizes. Panel makers will strongly push for such a migration.

Samsung and LG are adjusting their TV size portfolio to better match the drastic changes in panel supply this year; the share of 32” in their 2013 shipments will fall by 5% and 7%, respectively, with the volume moving to larger sizes. It is worth watching to see whether other TV brands will do the same thing. This may drive the upgrade cycle to larger sizes, though the lower prices required might make it at the expense of profitability for players along the supply chain.

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Others Barriers for trade:

(a) Quantity -based barriers.

(b) Price-based barriers.

(c) Barriers that impose physical or corporate presence in a domestic market.

(d) Procedures of government procurement and subsidization

(e) Barriers related to standards, certifications and industry-specific regulations.

Quantitative restrictions (QRs) are often used to restrict international trade in services, but unlike in the case of goods they are applied to providers of services rather than services per se. Along with QRs, price controls are also used to ensure that prices are not set at either market clearing levels or at the monopoly level. Some of the services subject to price controls in many countries are financial services, telecommunications and air transportation. Alternatively, tariffs are imposed to restrict trade in services that occurs via the cross-border movement of natural persons, e.g., visa fees, entry-exit taxes, or port taxes etc. But tariffs form a potential trade barrier for those services that are either embodied in goods e.g., films, television programs, etc. or for goods that are necessary inputs into the production of services, e.g., computers, telecommunication equipment, etc. Along with tariffs, service industries are also sometimes supported through explicit or implicit subsidies, especially in construction, communication and transport, which make it difficult for trade to occur.

Other important barriers to trade are standards, provision of licensing and procurement. In the service context, standard-type restrictions include non-recognition of imported services or services procured abroad (e.g., diplomas or degrees obtained from foreign country). Environmental standards may influence services related to transportation and tourism 24 Certification or licensing may required in case of professional and certain business services. These licensees are generally accorded by the government or professional business bodies and may limit entry into the industry. The government procurement policy may also be designed to discriminate in favor of domestic service providers. Examples of such services are education, data processing and non-medical professional services11.

Along with these barriers it has also been found that regulations regarding marketing and distribution can also pose as an important trade barrier. For example, in insurance regulations on advertisements limit the ability of foreign firms to compete. Also, in case of branded products distribution arrangements (e.g., establishment of a dealer network) may act as an important indirect barrier to market access.

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