Display Market Update

1. Display Market Update July July 25. 2007

2. Index Chapter 1. Latest Industry Issues Chapter 2. Monthly Market Update 1. Large TFT-LCD Panel • Shipment Trend • Price Trend 2. Plasma Display Panel • Shipment Trend • Price Trend 3. OLED • Market Issues 4. Component & Materials • BLU • Polarizer 5. SET Price Analysis • Flat TV SET Price Trend Chapter 3. Report Introduction 1. Car Use Panel Trend Analysis & Forecast 2. In-depth Analysis: Display Industry-Use ITO All contents of this file are copyright by the author and Displaybank

3. Chapter 1Latest Industry Issues

4. Latest Industry Issues - Korea LG Upgrade to 8-cuts PDP production LG Electronics (LG), announced that it will begin 8-cuts processing on its A3 plasma display panel (PDP) line, effective on July 2. This technique will maximize LG's PDP production capacity by allowing the company to produce eight PDPs from one sheet of glass substrate, up from the current six. The improved 8-cuts processing will increase LG's total capacity per month by 22 percent, from 360,000 to 440,000 panels, greater than the total capacity before the A1 line was shut down. LG's strategy to raise efficiency entails increasing per-line capacity while closing older, less efficient lines. In addition, glass substrate sheets used for LG's 8-cuts PDP production will be increased to 1,956 x 2,200 mm in size, compared to glass sheets of 1,956 x 1,650 mm in size used for 6-cuts processing. Korean Display Maker’s Q2 Result LG. Philips LCD Samsung Electronics LG Electronics • Sales increased by 23% to KRW 3,355 billion (USD 3,635 million). • Operating profit was KRW 150 billion (USD 163 million) • A net income of 1.42 trillion won on revenue of 14.63 trillion won. • Operating profit for the quarter was 0.91 trillion won on a parent basis or about 1.4 trillion won on a consolidated basis. • The LCD Business posted revenues of 3.34 trillion won, with operating profit of 290 billion won. • KRW 10,430 billion (USD 11,227 million) sales on a global basis, and KRW 5,903 billion (USD 6,354 million) on a parent basis. • Operating profit jumped 50.6% to KRW 464 billion (USD 499 million) on a global basis, and decreased to KRW 145 billion (USD 156 million) on a parent basis. All contents of this file are copyright by the author and Displaybank

5. Latest Industry Issues - Korea LG Electronics Moves into AMOLED Mass Production At its IR session for the second quarter, LG Electronics said that it has moved into mass production of active matrix (AM) organic light-emitting diodes (OLEDs), which are emerging as the next-generation display. On the other hand, the Korean giant will also phase out the production of the conventional passive matrix (PM) OLEDs. The company started volume production of AM OLED panels at Plant E, Gumi, North Gyeongsang province, and will soon launch two to three new mobile phones incorporating its AMOLED panels. In addition, the Korean vendor is also in close talks with LG.Philips LCD for the AM OLED business direction such as production of AM OLED panels using LG.Philips LCD's fourth-generation low temperature poly-silicon (LTPS) LCD glass substrates. All contents of this file are copyright by the author and Displaybank

6. Latest Industry Issues - Japan Hitachi to Focus on Large-format Flat TVs by Launching New Models Hitachi Ltd. has recently expanded its flat television model lineup by launching four LCD TVs and six PDP TVs between 42-inch and 60-inch. The Japanese vendor plans to release four LCD TVs (two in 42-inch and two in 47-inch) in September this year, and will also add PDP TV models to its lineup as early as this month. The company is placing its focus on large-size TVs through the 42, 50, 50 and 60-inch PDP TV lineup and the conventional 26, 32 and 37-inch LCD TV models. Nitto Denko to Build New LCD Protective Film Plant to Raise Capacity by 1.5 Times IPS Alpha Completes LCD Panel Expansion With Investment of 80 Billion Yen - Plans to Increase Annual Capacity to 5 Million Units Nitto Denko Corp. on July 2 announced its plan to build an LCD panel surface protective film plant in Kusatsu city, Shiga prefecture. With an investment of 8 billion yen ($65.269 million), the plant will come on line in Spring 2008. To respond to the shift to larger LCD TVs, the company will expand its capacity by 2.5 times from the current one. Nitto Denko has manufactured surface protective films at the Toyohashi plant and plans to build a new factory building in the Shiga plant area. IPS Alpha Technology Ltd. announced on July 3 that it has completed the capacity expansion of TV-use IPS LCD panels at its state-of-the-art panel plant in Mobara, Chiba prefecture, with an investment of approximately 80 billion yen ($653.859 million). The company is now working on equipment installations, and expects that it could achieve an increase from 200,000 units per month in 32-inch equivalents to 420,000 units by October. Therefore, the company will have a yearly capacity of roughly 5 million units. All contents of this file are copyright by the author and Displaybank

7. Latest Industry Issues - Japan Sharp Finalizes 10G Glass Substrate Size Sumitomo Chemical Upward Adjusts Diffusion Plate Output in Poland Sharp Corp. has finalized the size of glass substrates that would be rolled out at the tenth-generation (10G) fabrication line. Glass substrates at the 10G plant will be 2,880mm x 3,080mm, whereas the originally planned size was 2,850mm x 3,050mm. The company originally unveiled its plan to process 8 units of 57-inch panels or 6 units of 65-inch panels out of a single mother sheet at the line, but it aims to switch over the cutting process to 15 units of 42-inch panels, in an effort to reduce risk, if demand for 65-inch TVs will not meet expectations. It is said that the total investment in the 10G line is 500 billion yen ($543.5 million), and the company will make a final decision on the size by the end of this month. Its target time for launch of the new line is 2009. Sumitomo Chemical Co. Ltd. will increase its target output of the diffusion plate, a core component for LCD TVs, in Poland. The company will begin mass production of diffusion plates with a yearly capacity of 5000 tons at a new plant in Poland in November 2007, but will raise the output to about 10,000 tons with an investment of 1.5 billion yen ($12.148 million). The new plant, now under construction, is located in Torun, North Poland. The second diffusion sheet fabrication line is scheduled to be built in summer 2008. The new plant will also dedicated to rolling out polarizer films; hence, the total capex including the initial investment of 1.5 billion yen is 7 billion yen ($56.689 million). When the second facility comes on line, its yearly revenues will hit 15 billion yen, the company expects. All contents of this file are copyright by the author and Displaybank

8. Latest Industry Issues - Taiwan Taiwan's Three CCFL Vendors Begin Supply of Monitor Products to Korean Panel Manufacturers Market sources recently indicated that Taiwan-based CCFL (cold cathode fluorescent lamp) manufacturers such as Wellypower, Optronics, Delta Electronics and Sintronic Technology, an affiliate of panel maker Chunghwa Picture Tubes (CPT), sent samples to Korean panel vendors in the second quarter, Chinese-language Commercial Times reports. Despite the small volume of shipments, the official shipments will kick off in the third quarter. Major products are to be LCD monitor-use CCFLs, and CCFL manufacturers will also start shipping the samples of 32-inch LCD TVs from the second half of this year. All contents of this file are copyright by the author and Displaybank

9. Chapter 2Monthly Market Update • 1. Large TFT-LCD Panel • Shipment Trend • Price Trend • 2. Plasma Display Panel • Shipment Trend • Price Trend • 3. OLED • Market Issues • 4. Component & Materials • BLU • Polarizer • 5. SET Price Analysis • Flat TV SET Price Trend

10. Large TFT-LCD Panel Shipment by Application (Unit: Mpcs) • The shipments of Large TFT-LCD recorded 33.5 million units in June with 1% growth rate from the previous month. • Monitor and TV panel shipments in June grew slightly from May, when Notebook panel declined also slightly. • Despite the conventional slow season for TFT-LCD panel, Q2 shipments recorded outstanding performance thanks to the IT side. • Q3 shipments look healthy as TV panel demand starts to grow. All contents of this file are copyright by the author and Displaybank

11. Large TFT-LCD Panel Shipment by Maker (Unit: Mpcs) • AUO regained the top position with 6.9 million units after 5 months since last January followed by SEC and LPL for second and third place. • However, in terms of revenue basis, SEC took a position at first place with 21.9%, LPL second with 21.1% and AUO third with 19.8%. All contents of this file are copyright by the author and Displaybank

12. Large TFT-LCD Panel Price Trend NoteBook Monitor TV (Unit: US$) • Both increasing pre-orders since last April and Capacity adjustments by panel maker caused a tight supply situation. As a result, panel price has been continuously rising in Q2 as well. All contents of this file are copyright by the author and Displaybank

13. Plasma Display Panel Shipment by Size (Unit: K pcs) • PDP module shipments recorded 817 thousand pcs in June. • The portion of 50” segment has been growing up to 34% in June. • As Matsushita maintained the top position, SDI and LGE shipments have been recovering since January. • 32” SD model from LG started M.P. in June. • Most of PDP module makers expect that PDP demand will grow dramatically in Q3. All contents of this file are copyright by the author and Displaybank

14. Plasma Display Panel Price (Unit: US$) • Price falling speed of PDP module slowed down in Q2. • Even the average price of 42” HD rose in June for the fist time, as LGE raised its price. All contents of this file are copyright by the author and Displaybank

15. OLED Market Issue Long-term OLED Demand Forecast by Units (Unit: Mil pcs) • PMOLED demand will start to decline both unit & revenue base in 2008. • AMOLED revenue will be greater than PMOLED from 2008. • Mobile application will be the mainstream for OLED demand, followed by DSC, NotePC and Monitor. Long-term OLED Demand Forecast by Revenue (Unit: Mil US$) AM/PM OLED Production plan by Company All contents of this file are copyright by the author and Displaybank

16. LCD BLU Market Trend LCD BLU Demand Forecast by Revenue • BLU market is growing by 15.6% CAGR from 2005 to 2010 together with increasing demand for large-size TV. • BLU market size is expected to reach $11.9 Bil. in 2007, $15.6 Bil. in 2010. • TV-use BLU estimates to dominate over 65% of BLU market in 2008. • As TV-use BLU market grow remarkable pace, monitor and notebook-use BLU markets seems shrinking as it's losing the portion, however it grows as well. All contents of this file are copyright by the author and Displaybank

17. Polarizer Market Trend Polarizer Revenue by Major Makers Polarizer Shipments by Major Makers Polarizer Price Trend by Size • Comparing shipment and revenue of polarizer for two year from 2004 to 2006, the shipment shows 55% of average growth rate while the revenue shows only 22% of average growth rate. • Therefore, most of polarizer makers except Nitto Denko, recorded loss in 2006. • The reason for the big loss in 2006 was mainly due to fast falling polarizer price. • To make matters worse, the price of subsidiary films has been fallen in slow pace. • We expect the Polarizer market situation in this year will get better. All contents of this file are copyright by the author and Displaybank

18. LCD TV SET Price Analysis LCD TV Price Trend - US LCD TV Price Trend - Worldwide • Worldwide average price of 40”LCD TV remained almost same level in July with June. • Price gap between 40” and 42” narrowed to only $37 in July. • In US market, overall average price dropped by 3% from June • 37” is likely to fall below $1,000 in the next month. • 42” LCD TV price went lower than 42” in US, showing aggressive price strategy in July. All contents of this file are copyright by the author and Displaybank

19. PDP TV SET Price Analysis PDP TV Price Trend - US PDP TV Price Trend - Worldwide • PDP TV price has been stabilized since May. • 50” HD PDP TV price fell under $2,000 in both Worldwide and US since May. All contents of this file are copyright by the author and Displaybank

20. Chapter 3Report Introduction • 1. Car Use Panel Trend Analysis & Forecast • 2. In-depth Analysis: Display Industry-Use ITO

21. Car Use Panel Trend Analysis & Forecast Contents １. Introduction 2. Automotive Industry Trend 2.1 World Wide Car Shipment Market(2004～2009) 2.2 Car Manufacturing Volume by the Region and Growth Rate 3. Whole Trend of Car Use Display Industry 3.1 Survey and Technology Trend 3.2 All Car Use Display Shipment and Forecast(2005～2009） 4. Instruments Cluster Display Analysis 4.1 Instruments Cluster Display Trend and Analysis 4.2 Shipment and Forecast 4.2.1 Instruments Cluster Display Market by Unit 4.2.2 Instruments Cluster Display Market by Sale Strong Points : 1. Enable to analyze Car Use Panel by all car applications in worldwide. 2. Enable to catch up Car Use Panel technology and market trend. 3. Covering all Flat Panel Displays used for car applications. 4. Forecast future Car Use Panel market trend and its technology. 5. Analysis and Forecast of price trend for automotives. The 1st Car Navi installed Sharp’s 「Dual View LCD」(Source:Toyota) 5. Car Navigation System Display Market Analysis 5.1 Survey and Technology Trend 5.2 WW Car Navi Unit Market 5.3/5.4 PND Market/GPS Smart Phone Market Analysis 6. Car Audio Display Analysis 6.1 WW Car Audio Application Market and Forecast by Unit 7. Rear-Seat Entertainment(RSE) Display Analysis 7.1 WW RSE Unit and Display Shipment Trend and Forecast 7.2 RSE Display Market by Sales/Application/Unit 7.4 RSE Display Shipment by Size/Panel Type & Growth Rate 7.5 RSE Display Price Trend and Forecast by Size/Resolution 8. New Car Application Display Analysis 8.1 Market Trend and Forecast by Sales/Unit All contents of this file are copyright by the author and Displaybank

22. In-depth Analysis: Display Industry-Use ITO Display Industry-use ITO Market Forecasts Contents 1. Introduction 1.1. Research Objective 1.2. Research Methodology 1.3. Research Scope & Definition 2. Overview 2.1. Definition of ITO 2.2. ITO Application Fields 2.3. Properties Required for Transparent Conductive Layer and Evaluation Method 2.4. ITO Manufacturing Method 2.5. ITO Coating Method 2.6. ITO Industry Features Strong Points : 1. Enable to analyze ITO Target demand by region and device based on line status and capacity analysis. 2. Enable to understand worldwide ITO Target & ITO Film market based on shipment trend and capacity analysis. 3. ITO Target and film line capacity forecast and investment plan for each maker. 4. Forecast future ITO Target and ITO Film based on the core material price analysis. 5. Technology and replacement material development trend analysis. 3. ITO Target 3.1. Market Forecasts (2006~2011) 3.2. Capacity Forecasts (2006~2011) 3.3. Shipment Trends (2006~2011) 3.4. Supply/Demand Forecasts (2006~2011) 3.5. Pricing Trends (2006~2011) 3.6. Latest ITO Target Industry Issues 4. ITO Film 4.1. Market Forecasts (2006~2011) 4.2. Capacity Forecasts (2006~2011) 4.3. Shipment Trends (2006~2011) 4.4. Supply/Demand Forecasts (2006~2011) 4.5. Pricing Trends (2006~2011) 4.6. Latest ITO Target Industry Issues All contents of this file are copyright by the author and Displaybank

23. Complementary August Display Market Update • Date • August 29(Wed). 2007, 3:00pm(PST), 5:00pm(CST), 6:00pm(EST) • Program • Chapter 1. Latest Industry Issues • •Issues in August • Chapter 2. Monthly Market Update • 1. Large Area TFT-LCD Panel • •Shipment Trend (by July) • •Price Trend (by August) • 2. Plasma Display Panel • •Shipment Trend (by July) • •Price Trend (by August) • 3. OLED • •Market Issues • 4. Component & Materials • •ITO Target Market Analysis • •PDP Material Market Analysis • 5. SET Price Analysis • •Flat TV SET Price Trend • Chapter 3. New Report Introduction • Speaker • Sue Chung (Displaybank Introduction & Chapter 1): 10 minutes • Jusy Hong (Display Market Analysis): 20 minutes • Q&A: 5 minutes • Total: 35 minutes • Participate fee • Complementary with Free Presentation Material • Inquiry • Sue Chung (sue@displaybank.com) • Jusy Hong (jusy@displaybank.com) All contents of this file are copyright by the author and Displaybank

24. Thank You~ • Presentation material will be delivered to you via e-mail after the Webinar. • If you have any question about presentation, please contact the person below or you can visit Webinar Q&A board in our Website. • Sue Chung (sue@displaybank.com) • Jusy Hong (jusy@displaybank.com) All contents of this file are copyright by the author and Displaybank