Wave Issue 0208 3/8/02 Article 5-01

***DisplaySearch Reports Indicate Weakness in Small/Medium
Display Markets
(March 6)

DisplaySearch, a flat panel display (FPD) market research and
consulting company, revealed its latest pricing and shipment
results for small/medium display applications in two recently
published reports. The Q1'02 Quarterly Small/Medium LCD Shipment
Report indicated that all six small/medium markets examined in
Q4'01 – mobile phones, PDAs, handheld PCs, automotive monitors,
video cameras and digital cameras – experienced double-digit
declines in revenues and all but the digital camera market
experienced double-digit declines in units as shown in Table 1.
The Q1'02 Quarterly Small/Medium LCD Pricing Report revealed that
all display technologies (monochrome STN LCDs, color STN LCDs and
TFT LCDs) in each of the 6 markets suffered double-digit ASP
declines in Q4'01, with these declines continuing into Q1'02. In
addition, color STN LCDs and TFT LCDs are expected to fall at
least 22% Y/Y in both Q2'02 and Q3'02. With numerous TFT LCD
producers increasing their emphasis on small/medium markets last
year and with growth stagnant, pricing pressure is increasing.
This weakness is also evidenced by the low utilization rates
quantified by DisplaySearch at the fabs of the small/medium
producers.

While the small/medium markets are experiencing revenue, unit and
ASP declines, large-area markets for TFT LCDs have recovered with
units up 75% Y/Y in Q4'01 and revenues up 2.4% Y/Y, the first
annual revenue increase since Q3'00. With large-area ASPs rising
sequentially from Q4'01 and expected to rise on a Y/Y basis from
Q2'02, the large-area market should enjoy better financial
results than those focused on the small/medium market.

However, the reports do indicate some positive signs for
small/medium display producers. Unit shipments are expected to
recover in all small/medium segments on a Y/Y basis, except for
handheld PCs, in Q2'02. The mobile phone and PDA display markets
will experience Y/Y revenue growth in Q2'02. In addition, TFT
LCD penetration will increase in both Q1'02 and Q2'02 in the
mobile phone market and in Q2'02 in the PDA market. Despite the
higher penetration of more expensive displays, blended ASPs will
continue to fall, which, although bad news for display producers,
is good news for users and display procurement managers.

By application in Q4'01:

Nokia led mobile phone display procurement in Q4'01 with a 36.7%
share, followed by Motorola, Samsung, Siemens and Ericsson.
However, NEC was #1 in procurement of displays for both color STN
LCD and TFT LCD-based phones. Epson was the top mobile phone
display supplier, while Toshiba was the top TFT LCD supplier to
the mobile phone market.

In the PDA/SmartPhone segment, Palm's share increased in Q4'01
while Compaq lost ground at #2, Handspring lost ground at #3 and
Sony, HP and Casio gained share at the #4, #5 and #6 positions.
Picvue reclaimed the title of leading PDA/SmartPhone display
supplier, while ST LCD remained the leading TFT LCD supplier to
the PDA market. Compaq remained the leading buyer of TFT LCDs
for the PDA market.
Panasonic was the top OEM of automotive monitors for the third
consecutive quarter, followed by Fujitsu-TEN, Pioneer and Bosch.

Sony remained the top video camera display manufacturer in Q4'01
and JVC overtook Panasonic to become #2.
Olympus overtook Sony to become #1 in the Q4'01 digital camera
market, followed by Fuji Photo Film and Sony.
The Quarterly Small/Medium LCD Pricing Report is available for
$3,495 - $3,995 and covers all display sizes found in the mobile
phone, PDA, handheld PC, automotive monitor, video camera and
digital camera markets.

The Quarterly Small/Medium LCD Shipment Report is available for
$5,495 - $5,995 and provides shipments by display technology,
supplier, size and resolution in the mobile phone,
PDA/SmartPhone, automotive monitor, handheld PC, video camera and
digital camera markets.

www.displaysearch.com/usfpd.html