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Dearth of LCD TVs pushes up sales of plasma sets
 

GIVEN up for dead less than a year ago, plasma TVs are making a comeback, with manufacturers boosting sales forecasts amid a continued shortage of LCD TVs and surging demand in developing countries. “Plasma isn’t going to disappear,” said Jeff Kim, an analyst at Seoul’s Hyundai Securities. “It is still competitive in large formats, and will compete until 2010.” In less than two years, plasma-display technology has gone from dominant format to afterthought, then back to a viable option. In early 2006, plasma was the cheapest and most available choice in the 40-inch flat-panel TV market due to lower production costs and an ability to make larger panels. But only months later, LCD makers ramped up large-size production and quickly overran the market with LCD screens. Plasma makers then saw prices plummet and profits vanish.

South Korea’s Samsung and LG Electronics, the world’s second and third-ranked plasma panel makers, were particularly hard hit in 2007 due to price falls. Plasma screens use tiny charged gas bubbles to display images and more natural colour, while liquid crystal displays (LCDs) use crystals sandwiched between glass and a back-lit unit. Plasmas offer crisper picture quality but use more power and are heavier; LCDs offer brighter images but can be blurry. Now, plasmas are on an upswing again, as flat screen TVs are snapped up in wealthy and developing countries alike. LG said this week it intended to make 6.5 million plasma panels in 2008, up from 3.5 million in 2007, on rising demand.

The company, which posted a 24% operating loss margin in its display division in the second quarter of 2007, said that it may post single-digit operating profit growth by the year-end. Panasonic brand maker Matsushita expects strong sales momentum in the US in 2008, following sluggish sales through the summer, on demand for high-definition TVs, its regional head said. “Someone asked me, ‘What’s going on? Why all these new displays? I thought plasma was dead!’“ said Yoshi Yamada, chief executive of Matsushita’s North American unit, referring to crisper images and low-energy consumption screens on display at the Consumer Electronics Show in Las Vegas. “Don’t underestimate plasma technology,” he said. “Plasma’s success is due to lack of supply in LCD,” Hyundai’s Kim said, referring to tightness in LCD screen supply due to LCD makers’ decision to cut back investment after the industry suffered severe losses due to oversupply in 2006. With demand rising for flat screens of all sizes, plasma has found a lucrative niche supplying developing countries with small TVs at competitive prices. LG launched a 32-inch plasma TV last year that sold well, particularly among Chinese eager to buy flat panel TVs ahead of the August Beijing Olympic Games.

PLASMA’S ACE
Plasma screens use tiny charged gas bubbles to display images and more natural colour.
Plasmas offer crisper picture quality but use more power and are heavier
   
LCD MAGIC
LCDs use crystals sandwiched between glass and a back-lit unit on its screens
LCDs offer brighter images but can be blurry in its quality.

 
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