50-inch HD PDP Module Prices Likely To Drop Below $1,000 By The End Of 2006

June 23, 2006

Prices for 50-inch HD PDP modules are expected to fall below $1,000 by the end of this year, according to Displaybank, a market research institute. Its latest ‘PDP Module Manufacturing Cost Analysis and Forecasts’ report predicts that the decline in prices for PDP modules, accompanied by the fall in set prices, will stir up demand for large-format PDPs. PDP Module Price Forecasts (Source: PDP Module Manufacturing Cost Analysis and Forecasts, Displaybank) In the report, costs for 50-inch HD modules are expected to reduce by almost 21% from $1,070 in March to $845. Of the total costs, the material cost accounted for 64% in March, but this share will slide to 62% by December, while the penetration rate of processing costs is projected to increase from 36% to 38% by the end of this year. As efforts to shave costs for 50-inch PDPs, the material cost is likely to plunge about 24%, while the processing cost combining deprecation and labor expenses may post a relatively negligible drop of 16%. The circuit/driver section, which comprises the bulk of the material cost, is likely to see its penetration rate slide by 24%, while the panel section will also post a sharp drop of 26% in share, Displaybank explained. Glass, which represents more than half the material costs for the panel section, is expected to create an extra cost saving effect through a reduction in thickness from the current 2.8T to 1.8T. This trend will be also boosted by the increasing number of IC channels in the driver circuit section and a change in materials in the chassis section. However, as the decline in module prices may be more severe than that in total costs, profits for PDP modules will decrease to $75 per unit, the research firm points out. In addition, Displaybank forecasts that 50-inch module prices will fall below $1,000, stimulating demand for 50-inch products significantly from the end of this year. For example, the current mainstream 42-inch HD modules have experienced an upsurge in shipments since prices broke the $1,000 mark in the first quarter last year. On the other hand, the firm foresees that 50-inch PDP set prices will be down below $2,490 by the end of this year, with the price differential between modules and sets to narrow incrementally. Riding on the popularization of large-size TVs, the set pricing bubble has been shrinking, and this will directly increase consumers’ enthusiasm to purchase TVs, resulting in growth of the 50-inch TV market from the end of this year, the company predicts. 50-inch PDP Cost Structure (Unit: US$) 　 March 2006 December 2006 Decreasing Rate Material Cost 685.3 522.4 -23.8% Processing Cost 384.7 322.6 -16.1% Total Cost 1,070.0 845.0 -21.0% Module Price 1,215.0 920.0 -24.3% Profit and Loss 145.0 75.0 -48.3% Set Price 3,185.0 2,490.0 -21.8%

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