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Day 6 - IFA International

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MARKETS & TECHNOLOGY TRENDS THE WORLD TV MARKET DiSpLAYSEARCH – SpECiALiSTS iN UpSTREAM RESEARCH – GiVE iFA iNTERNATiONAL “THE REAL STORY” By Richard Barnes Paul, you’ve been in charge of the team at DisplaySearch for a year now. Tell us about what has been changing since you have been in your new role there. The main transition has been from the founding team who, over the past two to three years, have transitioned out of the business. Many new staff came on over that time period and we’re reorganising to become more of a global business based around key display categories: television, PCs, notebooks, digital signage, mobile devices and manufacturing and technology. (Left to Right) DisplaySearch team at IFA 2009: , Shawn Feddeler, Tim Bush, Paul Semenza and Paul Gray. Paul Semenza is responsible for managing the worldwide analyst teams at DisplaySearch. Previously Paul served as Vice President of Display Research for iSuppli Corporation from 2000- 2008 and for Stanford Resources, Inc. from 1997- 2000. How would you describe general market trends at the moment? Over the past year there have been two different trends. One is an overall slowdown in the electronics market measured by revenue. In some segments there has been slower unit growth, but across the board, aggressive price declines. That’s really kept the revenue picture down. But in certain segments, like LCD TV, growth in different regions and different market segments are really maintaining the growth on a revenue basis. For the next year, we expect to see continued momentum in the transition towards flat TV, primarily outside the US and Europe, because there’s still a large segment of the market that is CRT-based. There has been and we expect a continued slow-down in average screen size growth, which has been one key way of growing the market for the display industries, getting consumers to trade up to larger sizes. That’s slowed down, so it’s really about adding more value. So we expect to see such things as enhanced picture quality technologies coming on much more aggressively. The other thing that has been happening in the Global market is that the growth in China has been the strongest of all, and what that has caused is somewhat of a tightness in the supply of panels for TVs which has actually kept prices increasing. The panel is the key cost element and it has been increasing in price MONTHLY LARGE-AREA TFT LCD pANEL SHipMENTS AND GROWTH (MiLLiONS) July 08 June 09 July 09 M/M Y/Y Notebook PC 12,3 14,7 16,7 14% 36% Monitor 14,2 18,0 17,9 -1% 26% TV 8,0 13,1 13,5 3% 69% Other 0,9 0,9 1,0 11% 11% L/A Total 35,4 49,7 49,2 5% 39% Source: DisplaySearch August 2009 Monthly TFT LCD Shipment Database from the spring through August and possibly into September. There are some big new factories (fabs) coming online in the next few months. That might change things. Yes there are two things; one is the new fabs that are starting up, and the other is the fact that Taiwan, was hit very hard by the slowdown, basically most of the panel fabs shut down there. That was followed by a shut down of the glass making in Taiwan, and it takes a long time to come back up, so those fabs are there and we count them as capacity but several have not been able to run because of glass supply. They are now coming back on line, so we have this transition period we are in where we might be going from this somewhat tight supply situation to an oversupply situation, which would drive down pricing. What are the core values of DisplaySearch today? The maintenance of the core proposition, which was always to have a really comprehensive and deep data collection and forecasting methodology throughout the display industry. But of course, over time, since the acquisition by NPD in 2005, it’s also been about connecting the DisplaySearch value-chain information which goes up until sell-in to the channels, with the end market information from NPD. So it’s really expanding from raw materials to the retail view of the market. In that sense, are you putting more people out into the field? Yes, the mix of the staff has, over the past two years gone to about 60% in Asia. We have large staffs in Japan, Korea, Taiwan and a small staff in China, but that’s probably going to be the next area of growth. IFA International • Wednesday, 9 th September 2009 9

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