Regulatory Probe of LCD Market Widens

narramissic writes "Samsung Electronics Co. Ltd., Sharp Corp., Taiwan's AU Optronics Corp., and a U.S. subsidiary of Taiwan's Chi Mei Optoelectronics Corp. on Tuesday said they have been contacted by investigators who are looking into possible anticompetitive behavior in the flat-panel display market. This follows Monday's announcement by LG.Philips LCD Co. that it had been subpoenaed by regulators in the U.S., South Korea and Japan." From the article: "The probe centers on TFT (thin-film transistor) LCDs, according to Samsung. They are used in a wide range of electronics products including flat-panel televisions and computer monitors, laptop computers, cell phones and digital music players. The three companies being investigated are among the largest manufacturers of such displays. The investigation comes on the heels of anticompetition probes in the DRAM (dynamic RAM) and SRAM (static RAM) markets. The DRAM investigation focused on price-fixing, which is when vendors cooperate to set prices artificially."

Comments

LCD Production

[Velcroman98]

Most of the actual LCD screen manufacturing is done by few companies (like LG and Philips), and mostly in South Korea. The other retail names you all know just slap them inside their plastic housing with their name on the front (like Dell or Sharpe). Similar to how many PC's have one of two brands of manufactured CPUs. The consolidated manufacturing could explain perceived anticompetitive behavior, that and the $2 Billion start-up costs for an LCD fab.

Re:LCD Production

[MaWeiTao]

I feel compelled to add that Taiwan does at least as much LCD manufacturing as South Korea and Japan does it's fair share. The key companies are LG, Philips as you mention in addition to AU Optronics which is another huge player. They don't have their own brand, however, which is why no one ever thinks of them.

Sharp doesn't rebrand LCD displays produced by other manufacturers, not as far as I know. They design and manufacture their own LCDs and have produced some fairly innovative display technologies. The American computer companies tend to be the ones putting their own brands on someone else's product, Dell being one of the more prominent ones.

There are so many companies involved in the various aspects of LCD manufacturing and design that I'm a bit surprised that there would be any kind of collusion going on. And given how LCD prices prices have fallen, it makes it even more unlikely. But then again, I guess it's possible.

Re:It wouldn't surprise me

[ivan256]

I just bought a 1920x1080 47" LCD for $1700. Those didn't even exist two years ago, and smaller ones cost 5x as much.

It seems to me that they're keeping pace...

CPUs may be a better point than you think.

[Kadin2048]

Similar to how many PC's have one of two brands of manufactured CPUs.

I think this is the key issue. The situation with LCD displays ought to look like the situation with CPUs, but it doesn't.

With CPUs, competition between the two major players has created a price war and feature war, giving consumers more power for less money on a basically monthly basis. Billions of dollars of research have been spent trying to further the cycle of better, faster, cheaper (and recently, more efficiently).

I think that one of the reasons that the LCD market is being investigated is that it doesn't show as much competition as other high-tech sectors that are dominated by a few major players. It ought to be a cutthroat marketplace, where companies are struggling hand-over-foot to outdo each other and deliver a better product to customers for less money. While it's true that prices have come down, it's not the sort of drops that we've seen in semiconductors, and that's a little suspicious. It starts to look as though maybe the major players in LCDs have all gotten together and said "we don't want to get into it like Intel and AMD, so let's agree to slow things down a bit..." and while that may be good for them, it's bad for consumers and also illegal.