The imminent replacement of analog broadcasting by digital,
growing demand from industrializing countries and the constant
push for higher-and higher resolution television viewing paint
a bright picture for the liquid crystal display (LCD) market,
at least in the long term.
For the short term, however, things might be a bit more
rocky. LCD makers anticipate a slowing in market growth in
coming months due to the changing financial environment. But
growth, albeit slower, is still positive for the indium
industry. The metal is an operative element in the transparent
conductive indium-tin oxide coatings that are essential to all
LCDs, particularly since there's no viable substitute yet
despite tons of research into alternative materials.
Sharp Corp., for example, saw its first-half 2008 sales to
China alone near triple those of a year earlier, and the
company expects strong results in other so-called BRIC-Brazil,
Russia, India and China-countries as well. Is the LCD market
maturing after several peaks over the past six years? Perhaps,
but it's not there yet, according to Sharp. "We don't think the
LCD TV market is matured," said a spokeswoman for the Osaka,
Sharp continues to push for higher-resolution TVs, investing
$3.8 billion in a 10th-generation plant in Osaka that's set to
open in 2010. The company can technically produce 2,000- by
4,000-pixel displays, although the supporting broadcasting
software doesn't exist yet. This resolution beats the 1080p
format-also referred to as the progressive scan high-definition
television (HDTV) format, Full HD, True HD and Ultra HD-which
is the sharpest currently available on the market with a
resolution of 1,920 by 1,080 pixels.
Developments are being closely watched by indium fabricators
and alloyers because the amount of indium-tin oxide used in
LCDs rises both with resolution and increased LCD output. An
800- by 600-pixel display, for example, requires 2.3 times more
indium-tin oxide than a 640- by 320-pixel display, according to
LG Display Co. Ltd., Seoul, South Korea.
"We do many studies keyed to reduce the number of parts in
LCD panels to reduce costs," an LG spokesman said. "But ITO
(indium-tin oxide) is such an essential part of the LCD that it
cannot be replaced or reduced yet."
AU Optronics Corp. (AUO), Hsinchu, Taiwan, which worries
about indium price volatility, has been tirelessly searching
for alternatives to replace and reduce its dependency on
indium, but the company has yet to find a viable substitute.
Indium makes up about 86 percent of an indium-tin oxide
coating, according to AUO, which currently holds more than a
50-percent share of the global mini-notebook panel market.
Traditionally, a rise in indium prices has been associated
with higher LCD sales. In 2005, for example, indium prices
peaked at $1,100 per kilogram in the free market, more than 11
times the $95-per-kg average seen in early 2002, according to
AMM's price archives. That same year, the number of
LCD TVs sold in the United States soared to about 4.2 million
units, almost double the level of the previous year, according
to Rey Roque, vice president of marketing at television maker
Westinghouse Digital Electronics LLC, Sante Fe Springs,
Companies like LG have addressed higher component costs
through innovative cost models that trimmed its LCD costs by 7
percent in the third quarter of 2008 compared with the second
Meanwhile Sharp, AUO and others have been recycling indium
to squeeze more performance life from the material. AUO also
has been devoting resources to reducing product material
weight, consequently reducing its indium-tin oxide utility
levels. However, the company says it is satisfied with the
quality and low price of its indium-tin oxide supplies.
AUO said that although indium has been difficult to acquire
at times, the market is currently fully supplied, which is
keeping prices relatively low.
Nevertheless, experience shows that indium prices are
susceptible to volatility due to supply issues, especially
given the current reduction in global zinc production-indium is
a byproduct of zinc concentrate-as zinc prices continue to
fall, AUO said.
Westinghouse Digital said that the cost for indium, because
it's part of a blended cost of an LCD panel, can't be passed on
to customers. However, it is able to recoup those costs in
other ways, like selling the smaller LCD TVs that most American
households can afford.
New broadcasting regulations also are expected to drive LCD
sales. The federally mandated switch to digital from analog TV
broadcasting on Feb. 17 sets the stage for large-scale sales of
digitally compatible LCDs to replace the older analog cathode
ray tube (CRT) devices. Sharp estimates that the global CRT TV
and flat panel markets totaled 220 million units in 2008, with
LCD TVs accounting for almost 44 percent, or 96 million units,
leaving lots of room to grow. In 2007, total global TV demand
was about 190 million units, with LCDs accounting for about 39
percent. "We do believe this (transition to LCDs) is something
of a revolution," Nexgen said.
But lurking in the background are organic light-emitting
diodes (OLEDs), a potential LCD substitute that TV makers like
Westinghouse would pursue if the technology becomes cost
efficient. The OLED display doesn't require a backlight, which
means it can be paper thin and flexible, and its picture
quality is excellent. Indium-zinc oxide also is being
researched as a replacement for indium-tin oxide in OLED
displays for its smoother surface and reduced need for oxygen
treatment, according to the OLED Association.
At the moment, OLEDs are still much too expensive for
mass-market production, with Tokyo-based Sony Corp.'s 11-inch
OLED TV, for example, costing $2,500. ANDREA