DisplaySearch Expects Global Flat Panel Display Revenues To Exceed $84B In 2006 On 13% Growth - TV Revenues Expected To Rise 60%

October 23, 2006

DisplaySearch, the worldwide leader in display market research and consulting, indicated in the Q3’06 issue of its Quarterly Worldwide FPD Forecast Report that flat panel display (FPD) revenues for all applications, ranging from <1" to >70", are expected to rise 13% in 2006 to $84B. On a unit basis, FPDs are expected to rise 12% to 3.6B panels which will deliver 42.8M square meters of viewable area, enough to cover 5,711 soccer fields. Driving the growth is the exploding flat panel TV market with revenues for TV panels and imagers expected to rise 60% to $29.6B. The TV market is expected to account for 35% of all flat panel revenues in 2006, up from 25% in 2005 and 16% in 2004. While flat panel TVs are expected to account for just 29% of TV units in 2006, they are expected to account for 82% of TV display module revenues, up from 67% in 2005, and 48%% of TV display module area, up from 27% in 2005. Within flat panel TV revenues, LCD TV panels are expected to rise from a 66% share in 2005 to a 71% share in 2006 on 73% growth to $21.1B with plasma TV panels falling from 31% to a 27% share despite 39% growth in 2006 to $7.9B. Microdisplay imagers are expected to remain flat at $610M. The most recent quarterly results show worldwide shipments of flat-panel displays (FPD) increased 14% Y/Y and 1% Q/Q to 869.6 million units in Q2’06. Flat-panel display area was up 72% Q/Q and 52% Y/Y to 9.8M square meters, more than enough to cover 1300 soccer fields. This generated revenues of $16.6B in Q2’06, flat Y/Y buy 10% up Q/Q as the average price per square meter declined 23% Y/Y and 12% Q/Q. The report reveals trends in FPD and CRT shipments, sales and shares by technology and application. Some of the highlights of the report include the following: **LCD module shipments increased 21% Y/Y and 3% Q/Q to 608M units in Q2’06. LCDs accounted for 70% of all FPD unit shipments and 87% of revenues. Amorphous silicon TFT (thin-film transistor) LCD devices accounted for 74% of Q2’06 revenues, but just 25% of units. These displays are used in high-end mobile phones, notebook computers, desktop monitors, televisions and other consumer products. Blended amorphous silicon TFT LCD prices fell 8% Q/Q and 17% Y/Y, but passive-matrix (PMLCD) prices fell even more as TFT LCD took some business lines, most notably in mobile phones, forcing PMLCD prices down 27% Y/Y. On a display area basis, LCD prices per square meter fell 14% Q/Q and 25% Y/Y as average display size increased but average unit price decreased. Consumers got more display for their dollar. Thus, while LCD viewing area shipped increased 53% Y/Y to account for 83% of all FPD viewing area, LCD revenue increased only 15% Y/Y to $17B in Q2’06. **Plasma display panel (PDP) shipments increased 3% Q/Q and 73% Y/Y to 2.4M units in Q2’06. PDP modules are used for TV sets primarily and for public displays secondarily, so the unit share of PDP was only 0.3% of all FPDs in Q2’06, but due to its large size it accounted for 13% of total FPD area. PDP display area was up 81% Y/Y as PDPs migrate to larger sizes. PDP module revenues rose 52% Y/Y, but were down 1% Q/Q to $1.84B. The following tables summarize 1H'06 (Q1'06 plus Q2'06) sales results by technology and application. Table 1 shows lower-cost amorphous-silicon (a-Si) TFT LCD dominating the FPD technology market with a 75% share and expected to grow 14% to $63B. LTPS TFT LCD technology is growing slightly faster as they take share in handheld products. The total TFT LCD market is expected to reach $69B, up 14%. PDPs are enjoying the highest growth among the largest categories due to their focus on the rapidly growing flat panel TV market. Table 2 shows that LCD TV display sales were larger than desktop monitors in 1H'06. However, notebook PC and LCD monitor revenues combined are expected to outpace LCD TV revenues through late 2008. Table 2 also shows that rising pricing pressure for notebook and monitor panels in the 1H'06 stemming from excessive supply will cause revenues for these applications to decline in 2006 as price declines outweigh unit growth. Table 1 - 1H'06 and Estimated 2006 FPD Revenues, Share and Growth by Technology Technology 1H'06 Sales ($US Billions) 1H'06 Share 2006 Sales ($US Billions) Y/Y Growth a-Si TFT LCD $30.00 75.00% $62.60 14% PDP $3.70 9.20% $8.40 39% LTPS TFT LCD $2.80 7.10% $6.30 16% PMLCD $2.30 5.80% $4.60 -23% Other $1.20 2.90% $2.50 -1% Total FPD $40.00 100.00% $84.30 13% Table 2 - 1H'06 and Estimated 2006 FPD Revenues, Share and Growth by Application Application 1H'06 Sales ($US Billions) 1H'06 Share 2006 Sales ($US Billions) Y/Y Growth LCD TV $10.10 25.50% $21.00 73% Desktop Monitor $9.00 22.60% $19.20 -9% Mobile Telephone $5.90 14.80% $12.50 -1% Notebook PC $4.60 11.40% $9.10 -2% Plasma TV $3.40 8.50% $7.90 39% Other $6.90 17.20% $14.60 4% Total $40.00 100% $84.30 13% DisplaySearch's Quarterly Worldwide FPD Forecast Report provides actual shipment results for over 400 individual panels covering 20 display technologies and 39 different display applications while also providing forecasts on a rolling 16-quarter basis. For more information, please contact Richard Goldman at +1 (312) 952-5679 or sales@displaysearch.com. DisplaySearch will be displaying all its reports at the upcoming 2006 DisplaySearch Korea FPD Conference in Seoul on November 15 and at the 2006 Taiwan HDTV International Conference in Taipei on November 17 . More information on these and other events is available at www.displaysearch.com/events About DisplaySearch DisplaySearch, an NPD Group company, has a core team of 37 employees located in North America and Asia who produce a valued suite of FPD-related market forecasts, technology assessments, surveys, studies and analyses. The company also organizes influential events worldwide. Headquartered in Austin, Texas, DisplaySearch has regional operations in Chicago, Houston, Kyoto, San Diego, San Jose, Seoul, Shenzhen, Taipei and Tokyo, and the company is on the web at www.displaysearch.com. About The NPD Group Inc. Since 1967, The NPD Group has provided reliable and comprehensive consumer and retail information for a wide range of industries. Today more than 1,400 manufacturers and retailers rely on NPD to help them better understand their customers, product categories, distribution channels and competition in order to help guide their business. Information from The NPD Group is available for the following major vertical sectors: apparel, appliances, automotive, beauty, consumer electronics, food and beverage, foodservice, footwear, home improvement, housewares, imaging, information technology, music, software, travel, toys, video games, and wireless. For more information, visit www.npd.com.

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