Plasma panel growth takes a hit

Economic troubles have hit the plasma panel market causing a dramatic slump in shipment growth, according to iSuppli Corp.

Figures released by the research and advisory service say that global panel shipments will increase by 6.7 per cent in 2009, compared to 19.7 per cent in 2008.

“On the supply side, two of the three Japanese plasma panel makers – Pioneer and Hitachi – have announced plans to withdraw from the business,” said Riddhi Patel, principal analyst for television systems at iSuppli. “This leaves only Panasonic as the sole plasma panel maker in Japan, and even this company just delayed its new Amagasaki production line.”

The market exits of Pioneer and Hitachi comes after reorganisations at Korean plasma makers Samsung SDI and LG Electronics had already caused panel shipments to slow down.

“On the demand side, sales growth for televisions and other plasma-display products is not what it used to be,” Patel added. “Weak consumer spending and business purchases are discouraging plasma panel makers from ramping up production. The economic downturn is affecting both retail and business purchases.”

In the long term iSuppli says demand will recover at some point near the end of this year or in 2010. But the company stresses that 2009 will be slow across the board for plasma panel makers.

It is expected that quarterly plasma panel shipments will continue to follow seasonal patterns, with sales rising during the second half of the year. However, second-half sales will grow at a slower rate than in previous years.

Isuppli says to remain competitive amid current market conditions, plasma panel makers must alter their product strategies.

The group said while continuing to improve the picture quality and performance of their products, plasma panel makers need to place greater emphasis on reducing costs. They can achieve both goals by using better phosphors, single-scan technology or changing or enhancing the cell structures of their panels.

One key to plasma panel makers success lies with digital and retail signage as consumer demand takes a massive hit. In addition iSuppli says manufacturers must increase their focus on 50” and larger sizes as well as cutting costs and making full HD resolution standard on all products.

“For now, the sweet spot for plasma has moved to the 50-inch and larger market, where the cost benefits of choosing plasma give it an advantage over LCDs, Patel said. “But, just as in the 42-inch size, this advantage eventually will evaporate.”