LED-lit LCD TVs are projected to grow rapidly and dominate the TV market over the next few years. LED costs have been declining faster than LCD TV prices, making LED-lit LCD TVs more affordable. This shift benefits LCD panel makers and LED suppliers, as they capture more value compared to traditional CCFL backlight suppliers. Looking ahead, the experience and manufacturing scale gained from LCD production positions LED suppliers well to expand into general lighting and other display applications like OLED.

1. Rewind and Fast Forward
David Barnes
Chief Research Officer, LCD TV Association
Principal, BizWitz LLC
db@bizwitz.com

2. 2
Introduction/Disclosure
• The presenter has authored more than $10b of funded
investment plans for AMLCD factories.
• The presenter is biased. He believes that the snowball
effect of AMLCD (TFT-LCD) investment will overrun most
alternative display technologies for the rest of the 2010’s.
• The LCD TV Association believes AMLCD will remain the
dominant display technology for televisions in the 2010’s.
• The presenter and the association believe that LED
illumination (LED-lit) will replace CCFL illumination for
side-light and back-light subsystems in AMLCD.
• This presentation uses public sources of information.

3. 3
LED-lit LCD TV Will Lead the Market
LCD TV shipments
grew 32% per annum
from 2004 to 2009
and captured a 69%
global share.
LED-lit LCD TV units
may grow 59% per
year 2009–2014 and
capture a 82% global
share of TV sets.
LED were in 21% of
LCD TV last year and
may be in 51%, 2011.
TV Shipments by Technology
Millions of sets; DisplaySearch, Jan ’11, BizWitz analysis
0
50
100
150
200
250
300
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
CRT+RP LCD (CCFL) LCD (LED) PDP+OLED
millions

4. 4
LED-lit TV Prices Follow Historical Trends
• The price of LED-lit LCD TV sets has fallen 32% per year
…only slightly faster than the pace for all LCD TV sets.
• The price of 32” LCD TV sets has been falling 19% a year
… matching the pace of AMLCD panel price decline.
Sony Qualia
46” LED-LCD
$10,000
Global Brand
46” LED-LCD
$1,000
–32%/year
2004 2010

5. 5
LED-lit Costs Were Higher but Better
• Korean and Taiwanese producers inherited a
Japanese business model: value to suppliers.
• As they move to China, they prefer a new model:
value to themselves and their associates.
CCFL 18% of Backlight
5% of LCD Module
1% of LCD TV
Vendors Harrison Toshiba
Stanley, et alii
LED 40% of Backlight
12% of LCD Module
3% of LCD TV
Vendors Samsung LED
LG Innotek, et alii
CCFL-lit 40/42” 1H’09* LED-lit 40/42” 1H’09*
* DisplaySearch; BizWitz analysis

6. 6
LED-lit Costs Will Be Lower
• Introduction of two-sided illumination portends
continued cost savings and scale economies.
• LED cost will comprise a smaller portion of cost
…but the cost will paid to affiliated suppliers.
0
50
100
150
200
250
Q1'10 Q2'10 Q3'10 Q4'10
Average LED per LCD TV*
LED per
Perimeter
Inch
2H’09
2.6
2H’10
1.2
–55%
* IMS Research, BizWitz analysis; perimeter based on 40” TV

7. 7
Rewind and Reshape the Value Chain
TV Brand Panel Maker LED Supplier Related JV
Samsung Samsung LCD Samsung LED Samsung Micro.
LG LG Display LG Innotek Wooree
TPV (OEM) AOC AU Optronics Lextar Everlight, Epistar
Hon Hai (OEM) Chimei Innolux Formosa Epitaxy AOT, Chi Lin
• Tablets and Televisions provide opportunities for
brands and panel makers to capture more value.
• Former suppliers such as Harrison or SAES
Getters lose customers and revenues.

8. 8
Fast Forward to SSL
• LCD demand will not fill LED fabs after 2012.
• LCD experience prepares LED for SSL markets.
• OLEDreamers may wake up to find LED enables
wonderful, flat luminaires such as backlights.
Light Extraction
Coupling
Modulating
Light Control
Diffusion
Dispersion
Luminous Eff.
Cost per die
Cost per lumen
Heat Problem
Packaging
Assembling

9. 9
Summary: LED Play in Display
• Expected evolution from fluorescents to OLED
luminaires remains uncertain, as does the mass
market development of OLED TV sets.
• The evolution of LED to lights and display apps
seems more certain.
Fluorescent
lamps
Incandescent
lamps
LED
point sources
LCD
backlights
OLED
luminares
Display
apps