Taiwan and South Korea's LCD Market-Share Battle

prostoalex writes: "This lengthy article on Reuters Web site, filled with numbers and analyst references, talks about Korean and Taiwanese manufacturers starting a price war in the field of LCD. Apparently, last year all Taiwan-based manufacturers lost money, while Koreans made money, and the companies are ready to slash their prices in turn for market share." From my reading of the article, it looks like the manufacturers may actually be reluctant to trade profits for market share, but this kind of competition still sounds good for LCD buyers.

Comments

Sounds good!

[Lockz]

But how long will it last?

Cornea

[kisrael]

I recently got an 18" Cornea flatpanel. It's great, a terrific monitor at the price of the other guy's 17". I suppose some might balk that it only has VGA analog inputs, but that's all I'm ready for anyway.

I think the company is Korean, maybe did some work for OEMs, and now they're out on their own.

Probably all psychosomatic, but it feels great to only be beaming myself with hours and hours of CRT radiation at work, not at home...

Re:Cornea

[Liquidity]

You must have enormous sunglasses to cover that new eye!

Re:Cornea

[catwh0re]

It's possible that yours is an LG, which seem to be a popular, good quality, analogue input LCD screen.

On a side issue, it's important to note that while they drive down the price of analogue LCD, this drives down the price of Digital input LCD, as their differences aren't as marketable as their quality difference.

Holy cow!

[Skyshadow]

I was literally about to order a $1500 20 inch Dell flat panel today -- I was just logging into my bank to be sure my paycheck was deposited in another window when I popped over to /. and saw this.

Well, think I'll wait, then.

Re:Holy cow!

[invckb]

I think that a price war will only affect the commodity class monitors, maybe 15" and 17". There are only two or three companies making 20".

Wait and watch the Dell special offers. They often have 15% and 20% off Dell branded accessories. Usually around the end of the quarter...

I went through three video cards before I found one that could drive the FP2000 through the DVI input.

Re:Holy cow!

[miratrix]

I don't know, you have to remember that the demand for LCD is growing rapidly as well.

I bought my Samsung SyncMaster 170MP for about $2500 Canadian (~US$1700) almost 2 years ago, and the price is around $1000 right now. Depreciation of $700 for 2 years of wonderful service - that's $700 well spent in my books.

If you are waiting for cheaper/newer/faster/better technologies to come out, you'll never buy it...

Re:Holy cow!

[Skyshadow]

If you are waiting for cheaper/newer/faster/better technologies to come out, you'll never buy it...

While that's true, there is a breaking point for all prices.

For example, right now I'm looking at an iiyama visionmaster pro17 that I paid $600 for almost five years ago (and thought, BTW, that I was getting quite the deal). I think the prices for LCD screens in general are high now, but I *really* want one so I can buy a nice desk and unclutter a bit. Even so, if it looks like there's a price war on the horizen, I'll wait.

Re:Holy cow!

[Anonymous Coward]

For $1500 you have a large selection of 18-20" LCDs to choose from http://www.pricewatch.com/1/34/4216-1.htm

Re:Holy cow!

[Anonymous Coward]

Way to live from paycheck to paycheck with all your assets tied up in rapidly depreciating techno toys! People like you are shining examples of the American Way!

Re:Holy cow!

[Dr. Ion]

Same here.. I couldn't get a GeForce2 or PNY GeForce3 to drive the DVI on an FP2000 without speckle and snow, even at lower resolutions.

A PNY GeForce4 4200 did the trick, though. Tack-sharp 1600x1200, no problem.

I'm starting to wonder if DVI isn't so standardized.

Profits

[dattaway]

Define "losing" money. And what is "profit?" Is it how you phrase the question to the accountant?

These companies do invest great amounts of capital for machines and upgrades. Much of this is overtime and I'm sure the employees don't feel that this is a "loss."

Re:Profits

[GigsVT]

Time and a half for 5 cents an hour is 7.5 cents an hour. I'm sure they appreciate the overtime.

Screw LCD's

[EggplantMan]

I'm still waiting for OLED's.

price war? that figures -

[Anonymous Coward]

I just bought my very first LCD yesterday. oh well...

Re:price war? that figures -

[Anonymous Coward]

Think of it this way: you've got a great new monitor for your computer that

1. Was worth the price you paid for it, else you wouldn't have bought it; and

2. Is a piece of hardware that a lot of us are EXTREMELY envious of! :-)

Enjoy yourself and your new monitor!

I can see it now...

[Paladin84]

Headline: Taiwan and South Korea's LCD Market-Share Battle....
...in an online Starcraft tournament on Blizzard's Battle.net. The battle consisted of 14 hours of rushes utilizing the cheapest game unit possible while both countries exchanged insults such as "n00b", and "haha FAG!". Film at 11.

You know what they say...

[Anonymous Coward]

When LCD manufacturers compete, YOU WIN!

NEWSFLASH!

[the grace of R'hllor]

This just in: Computer hardware getting cheaper.

Okay, that's a bit cynical. Lovely news. I would consider an LCD, if I knew the quality was good and the price was better.

Although I found a great 15" LCD screen from a company called Gericom at 350 Euros, new, with energy company rebate. It looks better than most of the competition, quality and speedwise. No ghosting, clear picture, and all that.

It's a good thing for who.....

[wo1verin3]

...although LCD costs might be cheaper to the large laptop oems, it's doubtful any of them will immediately pass on the profits. In fact I'm fairly sure they'll wait for the competition to move before they do.

For the OEMS this price drop (potential price drop) would mean more profit with no effect on market share. Who would give that up unless they had to?

Re:It's a good thing for who.....

[IHawkMike]

it's doubtful any of them will immediately pass on the profits

It's ultimately the end user that determines the demand for the product (and hence determines market share) and the price of the product directly affects people's decisions. Besides, the LCD screen is a fairly large chunk of the cost of laptops so there's no reason that OEMs won't lower their prices as well. Desktop LCD screens are a fast-growing trend as well and this would directly affect their prices.

Realistically

[limekiller4]

Woohoo! That means that my computer case, which has two of them, will cost me the exact same thing as before!

Woohoo! =D

Re:Realistically

[limekiller4]

Wups. "LCD", not "LED". I suck. =)

Re:Realistically

[Anonymous Coward]

yup, you do.

Koreans make the best electronics

[Anonymous Coward]

They really know how to make great products.
I used to be a big Sony fan. Now with the cool MP3 CD Players coming out of Korea, and the cool looking table top LCD TV's retailing at $159.99. Imagine Casio with a tiny 3 inch cost this price alone. Forget Sony, you'll never see an LCD TV made by Sony at this price or quality.
http://www.merconnet.com/lcdscreens/tftl cdtvmonito radvanced.htm

Korea makes great products. Thank you.

Re:Koreans make the best electronics

[Anonymous Coward]

They make cheap mp3 player so they make good products?

ha ha ha ha!

you call it 'lenghty article'?

[porky_pig_jr]

do you suffer from Attention Deficit Disorder or something like that?

Re:you call it 'lenghty article'?

[WIAKywbfatw]

you call it 'lenghty article'?

Maybe he does. Perhaps he has group therapy with a shrink just down the hallway from your "Dealing with Dyslexia" class.

LCDs in TW

[fliptout]

I was in Taiwan last December, and nearly everyone there has flat screens. It was hard to find CRTs anywhere. Even public schools have flatpanels. I should have bought one there, i could have gotten a decent 17" for around $250.

My gf(who is taiwanese) and i go computer shopping often and we are always aghast at how much more expensive flat panels are here in the states. $500 for a 15" flat panel? No thanks. Fortunately we have the hookup in Taiwan ;)

Re:LCDs in TW

[modecx]

Wow, that's really amazing! I was planning on going for a tour of south Asia sometime in the near future. I may have to pick up 2 or 3 LCDs while I'm there. I'm curious, though.. Do you know how tax is handled on bringing items like this back into the States? Either way, I would likely be getting a hell of a deal, that's for sure. However, I was just wondering if FedEX-ing some goods to yourself would be a no-no, or if there is some procedure on importing things like this yourself, as I have very little experience out of country commerce.

Re:LCDs in TW

[fliptout]

My gf just reminded me that 15" flat panels were about 10000 NT, so around $300. That is still a better deal than what you will find in the US. That was half a year ago, so there are probably better deals now.

Depending on how much you buy, you will have to pay duty when you return to the US. Personally, I had less than $200 worth of stuff when i got back, so i didnt have to pay duty.

If you go to Taiwan, make sure to hit all the computer centers in Taipei. It's kind of funny how all the computer stores there are clustered together. Some place colloquially named the "black market" has a ton of computer shops in one place. You can ever get CDs full of pirated software from gangsters if you please :)

Oh, one last note. We also went to Japan- Japan has a ton of cool gadgets, but they will cost ~10% more than they would here in the states. That was my experience anyway.

Re:LCDs in TW

[modecx]

Cool, thanks for the info. I can see that I'll have to do a bit more research before I can go splurge on some LCDs (and not expect to have my ass busted by the taxes.) I faintly recall that dutied items are taxed at U.S. market value, and not at the price they were had for (makes sense--would help reduce market dilution from competition unloading their goods at outrageously low prices), but I'm not totally sure about that. I'll just have to be a smart shopper and not make too many spontaneous purchases.

I don't think I'll be shopping in Japan any time soon, even though they do have some really neat stuff (that will likely never make it to the US market), the prices as you noted are pretty outrageous. From what Iv'e seen on the web, I'd guess that 10% is a very conservative estimate :) I don't plan on hitting any of the big population centers (if such a place can be said to exist) in Japan anyway, but I will visit some old family friends on Okinawa, and perhaps visit some of the old temples.

At any rate, I'll be steering clear of shady looking characaters pawning off their CDs.. :)

Re:LCDs in TW

[Anonymous Coward]

You won't get great deal unless you shop in the areas where
the locals do their shopping.

And Hong Kong is the place to buy all sort of cheap stuff.
They have the lowest tax rate on the world.

Re:LCDs in TW

[Anonymous Coward]

I was just wondering if FedEX-ing some goods to yourself would be a no-no, or if there is some procedure on importing things like this yourself, as I have very little experience out of country commerce.

Just keep the receipt, especially because of the large price difference. When you arrive in the US you have to fill out a customs form saying how much worth of goods you're bringing back. If it's less than US$400 you don't have to pay duty. If it's $401-$1400 you pay 10% on the amount above $400, although they've never actually charged me. Above $1400 I guess higher fees apply.

There's also a box to check if some of your goods aren't accompanying you. I haven't had that, but I guess if you check it, they give you another form to give the FedEx agent to avoid paying the duty you normally would.

If you have it just sent to you rather than bringing it back from a trip, the duty starts at $40 instead of $400.

Better safe than sorry...

[WIAKywbfatw]

Enjoy yourself and your new monitor!

If you're going to listen to this advice then I hope you've got a box of screen cleaning wipes handy.

Re:Better safe than sorry...

[WIAKywbfatw]

LMAO. Can't you come up with something original?

Samsung

[HisMother]

The Korean company Samsung has a lot to do with this, I think. They absolutely own the high end market. I'm lucky enough to have a Samsung 240T, which is a 24" diagonal unit that can do 1920x1200 and can mix the digital and analog inputs (picture in picture). At $4995 (almost two years ago) it wasn't cheap, but it's rock solid, gorgeous, has an incredible viewing angle, and nothing else came close (at the time, anyway). Samsung used to have a rep as a crapfacturer, but these days they've really come up in the world.

....price wars are not that good.

[jukal]

selling products under own costs is not any good for the consumer in the long run. They are not lowering the prices to do common good. Instead they do it to kill the other one and make bigger profits later by raising prices.

Re:....price wars are not that good.

[fermion]

The effect of price wars really depends on the industry. It the case of LCD display panels, I can only see it as good.

In my limited experience, I have never seen the sale price go below the base cost to manufacture that product, that is, the cost to run it through the assembly line, package it, and ship it out. What will happen, however, is that the market may not support the inclusion of research, management, and other ancillary costs. Now, if the company is well run, there will be other, generally more advance products, that can be sold to support the ancillary costs, and of course profits.

I believe this relates directly to the LCD market. It should be possible for companies to aggressively price smaller LCD monitor (less that 17"), while shifting the other cost to the bigger sizes. In fact, by keeping price of the smaller sizes unnecessarily high they limit the number of consumer who are going to shift from CRT to LCD technology, thus limiting the growth of future demand.

The LCD manufacturers are further shooting themselves in the foot by allowing the CRT manufacturer to rapidly increases the minimum acceptable monitor size, right now about 19" for about $200. The CRT manufacturers clearly understand how to use aggressive prices to keep a market. I hope the LCD manufacturers, which is rapidly becoming a very mature market, have a price war so they can learn how use such pricing to take market share.

Re:....price wars are not that good.

[Anonymous Coward]

In my limited experience, I have never seen the sale price go below the base cost to manufacture that product

Ever owned an XBox, Playstation 2, steel-handled razor, early TiVo, Kodak disc camera, ...?

Re:....price wars are not that good.

[slittle]

The LCD manufacturers are further shooting themselves in the foot by allowing the CRT manufacturer to rapidly increases the minimum acceptable monitor size, right now about 19" for about $200

I don't know about that...

On one hand, how long is that going to last? Big CRTs are.. big, not to mention fucking heavy. Not everyone has the space to put a monster CRT.

On the other, since those same CRT mfr's are forcing the bigger screen sizes, people who are convinced of the size but don't have/want to waste the space may trade money for space and move to LCD.

More widescreen (like Apple's.. whatever it's called) LCD's would be fuckin cool too. My eyes are side by side people, my field of vision is not square!

Re:....price wars are not that good.

[Anonymous Coward]

The price war isn't going to KILL all the competition, just scare others away from enetering the marekt where there are few profits.
Even if a pricewar did bump some people off and the manufactures COULD mage huge profits those very same profits would draw many with $ into the game. I've learned at lot abou venture capital, and those guys have some money BUT private equity firms like lbo or buyout firms have money by the billions and can pony up the cash to compete with almost anyone if they want.

Oh yeah, great idea...

[SpankTech3000]

>>it looks like the manufacturers may actually >>be reluctant to trade profits for market >>share, but this kind of competition still
>>sounds good for LCD buyers

This kind of competition sounds great for stabilizing the economy. Aren't these the same tactics all the CLECs were using before they all when bankrupt and were bought wholesale by AOL & AT&T?

Whew!

[Anonymous Coward]

Man am I hungover. Also, linux is for bitches.

Poster Error?

[OldMiner]

Posted article reads:

Apparently, last year all Taiwan-based manufacturers lost money...

However, the article reads:

Profit margins for Taiwan display makers stood at around 20 percent in the second quarter of this year versus 25-30 percent for Korean firms

If the poster is accurate, this means that the Taiwanese profits have grown from some unknown negative to a postive 20 in less than a year. Decent gains on profits if you ask me.

Re:Poster Error?

[Anonymous Coward]

Everyone is losing money right now (I work R & D for one of the big Korean firms)...market share is simply a land grab by any means. The battle is to see who can tolerate low margins the longest. Once the other guy cries uncle, margins will have returned naturally, and profits can then be enjoyed.

No way are profit margins as high as stated.

The Korean manufs, are very good at long term planning in this regard.

Consumers are a key factor, of course, and there is no reason to believe they will come out on the short end of any of this.

...price wars...

[crisco]

Nowhere does it say they are dropping prices below cost, either in the Rueters article or in the /. summary.

Besides, aren't they counting on a few additional facts?

• LCD prices are continuously dropping due to improved manufacturing processes
• larger volumes means lower prices

I'm guessing the plan is something like this:

1. Drop prices below cost
2. Take market share away from already weak competitors, eliminating them
3. Greater market share means greater control over pricing, allowing them to drop prices slowly while reaping the rewards of drops in cost.
4. Profit!

Cool!

[timeOday]

So globalism DOES have a bright side, eh?

amen brother!

[Anonymous Coward]

and at the same timre you're driving down the prices for others.
truely an American icon.

I hope the prices don't fall

[wackybrit]

Two days ago I bought a Sharp 16" TFT. It cost $650, so you might say.. "shoulda got a 17 incher!" But.. it's the absolute luxury top of the range 16", with features only the best (and mighty expensive) 17" screens have.. like anti-glare, 25ms response time (compared to the regular 50ms).. and 1280x1024 res.

That all said, I hope prices don't fall! I want to be able to sell this baby for at least half what I paid for it in a year's time! Then again, whenever I buy something it seems to crash in value the week after anyway.. so perhaps I should buy an Apple Studio Display next, huh?

Re:I hope the prices don't fall

[jellybear]

>> That all said, I hope prices don't fall! I

Well, if the prices don't fall and you succeed in selling your monitor for at least half-price, you'll still end up losing money because the upgrade will be more expensive. Conversely, if prices DO fall, you lose out on the resale, but you save on your next monitor. The best of both worlds would be if you were to sell your monitor while the prices are high, and then buy a new one after the prices fall. But, if you did that, what would you use in the interim?

Good for supply lines, too.

[Xunker]

From what I know, the majority of LCDs produced today are still made in Taiwan.. and that's a bad thing.

It's teh same problem that chip manufacturers are facing -- what happens when the majority of your compoinets are made in the same small area of land? should something catostophic happen, your supply could be completely wiped out.

Other's getting into the game is good for this so whouls something happen to Taiwan like a major earthquake (it is on the "ring of fire") you still have other suppliers in other places who can help take up the slack.

Remeber the Fire in a Taiwanese industial park a few years ago? One factory catching fire sent memory prices soarsing for a few weeks.. just think if a few factories where utterly destoyed?

Insightful?

[Anonymous Coward]

They manufs. controlling the prices are simply waiting for an opportunity to re-establish profit margins. They will fight for control, while margins return...this does not mean that once they have control, prices will rise.

Don't spread FUD by calling flawed logic 'insightful'.

Where did this information come from?

[Anonymous Coward]

Korea & Taiwan manufs. are both losing money right now (I work R & D for one of the big Korean firms)...market share is simply a land grab by any means. The battle is to see who can tolerate low margins the longest. Once the other guy cries uncle, margins will have returned naturally, and profits can then be enjoyed.

No way are profit margins as high as stated. Any number over 5% is bs.

Actually it wont be good for LCD buyers

[Anonymous Coward]

in the long term at least.

Profits from LCD drops. Investment in increasing current capacity drops (investing in shoe manufacturing is more profitable). If thats not bad enough, investment in future OLED manufacturing processes drop drastically.

LCD buyers are left dealing with supply shortages, and worse .. they will not be getting newer/better LCD technology anytime soon.

IANAEBIRAS (I am not an economist but I read Adam Smith)

LCD competition? What a joke.

[coopaq]

Someone tell me why I can get a 15 inch LCD on my
laptop with UXGA 1600x1200 pixel resolution, but
can't find a 15 inch LCD monitor with the same
resolution for any price.
Oh yes. There are 20 inch LCDs for over $1500 with
that resolution, but a cheap old 19 monitor
for $300 these days supports 1600x1200.

Point is... I believe LCD industry is holding back
on sweeter resolutions to get everyone to
upgrade after everyone has purchased an LCD. And
EVERYONE hasn't purchased an LCD yet.

Re:LCD competition? What a joke.

[Weasel Boy]

"Someone tell me why I can get a 15 inch LCD on my
laptop with UXGA 1600x1200 pixel resolution, but
can't find a 15 inch LCD monitor with the same
resolution for any price."

Because most people don't want resolution that high on a screen that small. For non-portable systems, they'd rather take that same resolution and put it into a 21" display. On a laptop, they can't do that, so they have to make do with the 15".

Sounds good to me!

[bruthasj]

As a software engineer/lead dude in Taiwan, i feel that the more fabs outputting the merrier. I keep my job and everyone stays happy -- obviously the customer will benefit the most from such a competitive environment. Kinda like the RAM market was a few years back.

Right now I'm working on Acer-Unipac Line 8 which is a 5G (fifth generation) outfit that put's out glass beginning in the 21" form-factor. The previous fabs like L6/L5 will pick up speed in the 17" arena. I think Samsung's newest place in Korea is also 5G and was up and running well before Acer.

The next 5G fab coming up is Chimei Fab 3 in Tainan . Both the Acer and Chimei fabs will be rolling full production by next spring. This will bring TV-class LCD panel prices down quite a bit.

The carrier sizes for these babies are huge -- I mean like the size of your regular cubicle. Good ole wafer fabs you used to be able to hand-carry the product around. These you need a forklift. But since they don't have any "clean" forklifts they have to use these funky $60,000 USD handcarts that move them around.

Anyway, I'm blabbing ... but just remember AUO Fab 8 and Chimei Fab 3 in Taiwan coming up soon. LG / Samsung has one 5G running as we speak and probably another one coming soon. In fact, I heard AUO Fab 9 will be done by the end of next year...

So, I probably said too much, but I didn't sign any NDA, so I don't care...

Still not worth it

[BlackHawk-666]

A few guys at work (IT company specialising in online apps) have LCD's, but I'll take a 21" CRT monitor anyday. The image is sharper, the refresh rates are higher (85hrz) and there's much more room for my screen hungry IDE. LCD's just haven't reached a price point in the UK where it's worth buying them. Once they reach 350GBP for a 19" monitor then I'll be ready to swap over. Hell, I might even get three and run a multi-screen desktop, like the traders do. Personally though, I reckon Doom III will still look better on a big-ass CRT due to colour saturation and improved refresh rates.

Re:Still not worth it

[RayChuang]

While 21" monitors are very nice in display quality, they do have a couple of downsides:

1. A 21" monitor consumes quite a lot of power. They average about 150-170 W draw when running in full power mode. Most larger-screen LCD's consumer about 1/3 to 1/4 of that.

2. A 21" monitor also weights a lot, too. They weight over 70 lbs. in weight on average, which could strain some desk designs. A top-end 19" LCD weights about 13-15 pounds in comparison.

3. A 21" monitor takes up a huge amount of space depth-wise.

Besides, today's 18-19" LCD's at 1280x1024 resolution are getting quite good. For around US$950, you can get top-end NEC and Viewsonic models with very sharp displays and very fast response times (necessary to play games and play back DVD's).

With LCD still expensive ...

[Taco Cowboy]

and if the Taiwanese are LOSING MONEY, then the Taiwanese are doing SOMETHING TERRIBLY WRONG !

I mean, we are not talking about making floppy disks here. These LCD babies are STILL expensive !