DisplaySearch Reports Plasma Panel Shipments Rose 47% In Q3'06 - Slower Capacity Growth And Increased LCD Competition Impacting Results/Outlook

October 31, 2006

DisplaySearch, the worldwide leader in flat panel display (FPD) market research and consulting, reported in its Quarterly PDP Module and TV Shipment and Forecast Report that plasma panel shipments, the panels found in plasma TVs and public displays, rose 17% Q/Q and 47% Y/Y in Q3'06 to a record 2.8M units. Plasma panel revenues also earned a record high in Q3'06, rising 10% Q/Q and 29% Y/Y to $2.02B, the first time plasma revenues exceeded $2B. Plasma panel ASPs were down 6% Q/Q and 12% Y/Y to $724. Despite the record results and seemingly healthy growth, Q3'06 growth was significantly slower than any other quarter to date with Y/Y growth over the past 12 quarters ranging between 73% and 170%. Furthermore, plasma panel suppliers are expecting even slower growth in Q4'06, up 20% Y/Y to 3.2M units. Assuming plasma panel suppliers hit their Q4'06 targets, 2006 panel shipments will rise 49% Y/Y in 2006 to 10.7M units which is less than half the growth of previous years. Slower plasma panel unit growth can be explained by a number of factors such as: *Slower capacity growth of just 46% in 2006 compared with 92% in 2004 and 66% in 2005. *Migration to larger sizes which reduces the number of panels that can be produced per substrate. The 50”+ share of worldwide plasma panel shipments has doubled from 12% in Q3'05 to 24% in Q3'06. *Tighter supply due to the slower capacity growth which has reduced pricing pressure and impacted demand. For example, 42” ED and HD prices fell 29% from Q3'04 to Q3'05, but only 23% - 24% from Q3'05 to Q3'06 on tighter supply. Furthermore, due to the emphasis on larger sizes, the blended PDP module ASP declined just 12% from Q3'05 to Q3'06 compared with 28% from Q3'04 to Q3'05. *Increased competition from LCD TVs below 50”. 40"-47" LCD TV panel shipments have risen 560% from Q3'05 to Q3'06 to 2.4M units, taking significant share from plasma as 720p prices approach parity while 1080p LCDs offer increased differentiation. LCD TV panel shipments were larger than plasma TV panel shipments at 37"+ for the first time in Q3'06 and are poised to overtake plasma at 40"+ as early as Q4'06. Supporting LCDs is massive growth in 40"+ optimized capacity with 7G+ capacity rising 284% from Q3'05 to Q3'06 and a number of major brands shifting their 42" emphasis from PDP to LCD. HDTV formats continued to drive plasma panel shipments with the HD share rising from 73% in Q2'06 to 79% in Q3'06 on 28% growth and expected to reach 86% in Q4'06 on 23% growth. 1080p shipments also surged in Q3'06, rising 183% Q/Q in Q3'05 to 21K shipments and a 1.1% share. In Q4'06, 1080p panels are expected to rise 78% to 38K units and a 1.5% share. By supplier, LGE led on a unit basis on 27% growth to overtake Matsushita as shown below and was the only supplier to gain share. It was #1 for the second time in three quarters. On the other hand, Matsushita led on a revenue basis for the third time over the last four quarters due to its emphasis on higher resolutions. Each company had an average diagonal of 43.8" with 82% of Matsushita's volume at HD compared with 70% for LGE. In addition, 3% of Matsushita's volume was at 1080p compared with 0% for LGE. On a unit basis, LGE was #1 at 42" ED, 42" HD and 60"-65" HD while Matsushita led at 50" HD and 1080p. Plasma Panel Share and Growth by Supplier Supplier Q2'06 Share Q3'06 Share Q/Q Growth LGE 29.9% 32.5% 27% Matsushita 30.9% 30.4% 15% Samsung SDI 23.4% 23.2% 16% FHP 10.4% 8.9% 0% Pioneer 5.4% 4.8% 3% Orion 0.1% 0.1% 7% Total 100.0% 100.0% 17% For detailed PDP module shipments, PDP supply/demand, PDP TV shipments by brand and region and rolling 16-quarter shipment, cost and pricing forecasts, please see the latest Quarterly PDP Module and TV Shipment and Forecast Report. For information on any DisplaySearch report, contact Richard Goldman for additional information at (312) 952-5679 - sales@displaysearch.com or contact your regional DisplaySearch offices in Japan, Korea, Taiwan and China. DisplaySearch will also be holding upcoming events in Korea, Taiwan and North America which will include coverage of the plasma market. For more information on any DisplaySearch event, please visit: http://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. The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, visit www.npd.com

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