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Prospects for Microdisplay Based Television
by Charles McLaughlin | chuck@mcgweb.com | Telephone: 650 323 7155

Abstract

The major growth opportunity for microdisplays over the near term is in the television market, where both front and rear projection models are being rolled out to compete with incumbent RPCRT models and the plasma and AMLCD flat panels. This paper looks at the television opportunity and projects market volumes for microdisplay technology sets based on an analysis of performance and price trends. It looks at the prospects for LCOS technology in a HTPS and DLP world.

Background

The current economic recession has had a significant impact on the microdisplay industry. The annual growth of sales of front projectors in the presentations market slowed last year to 15% and 2002 growth will be about the same. While the camcorder viewfinder market remains strong, other near eye markets have failed to develop, resulting in the failure of a number on companies focused on embedded viewers and headsets. The slowdown has also made it difficult for LCOS microdisplay producers to gain a foothold in the established markets.

While most analysts agree that world economy will rebound, the question remains as to when. The size of two existing markets for microdisplays, presentation projectors and viewfinders, are expected to rebound to unit growth rates of more than 20% annually. Microdisplay revenue growth in these established markets will average less than 10% annually, taking into account continued price erosion in these established market. Overall sales of microdisplay modules are forecasted to grow from slightly less than $1 billion in 2002 to more than $1.4 billion in 2006.

Clearly, for the industry to return to the >25% annual growth rates of the past 5 years, new opportunities must be developed. At the top of the prospect list is the home entertainment market. Three strategies are being pursued:

1. Displacing the venerable CRT from rear projection television
2. Enabling a new generation of wide screen thin profile high definition TV
3. Putting home front projectors on the map

Television: the next big thing

There is a strong consensus that the market for high performance home television will grow rapidly over the next five years. The explosive growth of DVD, the upgrading and revamping of digital cable, and the emergence of broadcast HDTV have all combined to provide consumers with an array of affordable sources of high quality video and sound. AS shown in Figure 1, the latest MCG forecast predicts that worldwide growth of high performance televisions will be at a rate of 22% per year, with unit sales increasing from 12 million in 2001 to more than 32 million in 2006.

Figure 1. Worldwide Unit Sales of High Performance Televisions

The large potential of the home TV market has attracted the attention of the entire display industry. Major product improvement and price down initiatives have been mounted as follows:

  • Direct view CRT television. High definition, flat screen, wide aspect ratio sets are now widely available with prices under $2000. Sub $1000 prices are targeted.
  • Rear projection CRT. Wide screen, high definition versions of current products are expected to be available at small modest premiums over NTSC models by 2004.
  • Plasma flat panel TV. The plasma industry is now focusing on the home market. Smaller 40 inch models are targeted at sub $3000 price points.
  • AMLCD flat panel TV. Industry leaders are already showing 30-40 inch models and promising availability in 2003. Street prices below $3000 are promised.

To compete for a share of the home television market, microdisplay based projection TVs must not only displace the incumbent CRT based systems but also demonstrate a compelling value proposition to compete with direct view alternatives.

Projection value proposition

It takes more than a pretty face to compete in the television market. To penetrate the market, microdisplay based TVs need to also demonstrate competitive reliability and be adopted by leading consumer brands to assure a strong presence in the sales channel. Further, sets must sell profitably at established price points.

It is beyond the scope of this paper to make a detailed comparison of the image quality of the competing TV technologies. Further, the history of television clearly demonstrates that the best image does not win; rather what is required is only an acceptable image, a reputable brand, and the right price. But suffice to say, microdisplay front and rear projection systems demonstrate very competitive image quality. Contrast, color saturation, brightness, white point, motion artifacts, and pixel counts are well within market requirements and better than or equal to CRT rear projection. Lamp life and viewing angles, however, remain stumbling blocks.

The television industry historically has never offered a warranty on product lifetime. Time to half brightness for CRT television is not specified. But CRT TVs age gracefully. They fade in brightness without major color shifts and never go black. Microdisplay projectors also fade, but more importantly do go black. A lamp burn out cannot be ignored. The logistics and cost of lamp replacement must be anticipated. Will the consumer be surprised when the lamp fails? Will lamp burn out tarnish brand name?

Viewing angle is the second weakness of rear projection television, both CRT and microdisplay. The use of high gain screens boosts brightness in the preferred viewing cone at the expense of wide viewing angles. CRT and plasma TVs have wide viewing angles and current AMLCD flat panels are fast approaching such performance. Brighter projection engines in combination with low gain screens can dramatically improve the competitiveness of microdisplay rear projection TVs.

But the major competitive edge for microdisplay projection TV is low cost. Rear projection models have the potential to sell profitably at street prices under $1500. Front projectors can sell at prices less that $1000. Wide screen 40 to 60 inch high definition televisions can sell at modest premiums over CRT models and at prices well under 40 inch plasma sets. Street price forecasts for the competitive high performance televisions are shown in Figure 2. By 2006 average prices for home front projectors are expected to be $1200 with rear projection big screens averaging $1500.

Figure 2. Forecasted Street Prices for High Performance Televisions

The latest MCG forecast predicts that microdisplay based rear and front projectors will successfully compete in the home entertainment market, displacing CRT technology from rear projection and improving the overall competitiveness of projection television against direct view alternatives. Total rear projection sets are forecasted to continue to grow at 20% per year to more than 6 million units in 2006 and front projection sales are expected to grow to nearly 2 million units. In combination, front and rear projection television represent a market that is more than twice the size of the presentations front projector market and has the potential to generate more than $1 billion in microdisplay module revenue by 2006.

Comparison of microdisplay technologies

All of the leading microdisplay companies are actively optimizing their products for television. Early production products are already available at premium prices. Sets with high temperature polysilicon (HTPS), digital micro-mirror devices (DMD™) and liquid crystal on silicon (LCOS) all demonstrate adequate performance. The issue facing television branders and integrators relates to cost. Do any of the 3 technologies have a clear cost advantage?

The cost comparison issue quickly boils down to comparing two components:

  • Optics cost. The cost of all of the optical elements that are required between the lamp and projection lens.
  • Microdisplay module cost. The cost of the microdisplay imaging device(s) plus the required custom integrated circuits to interface the imagers with the system media processor. The evaluation must be weighted to normalize for light throughput.

With respect to optics cost, the LCOS technology is at a clear disadvantage compared to HTPS and DMD. The LCOS community continues to support several optical architectures, each requiring a set of novel optical elements. The HTPS and DMD solutions, on the other hand simply implement proven architectures and components which are already commercially available.

With respect to microdisplay module costs, DMD technology appears to have an advantage. For any given imager size, a single imager DMD system with color scrolling can match the light output of a 3 imager HTPS or LCOS imaging system. While historically, the single imager DMD module has sold for a higher price than an equivalent 3 imager HTPS module, Texas Instruments has clearly stated its intent to reduce the module pricing to support lower priced high volume television projectors. With HTPS and LCOS suppliers promising 3 imager television modules at prices approaching $150, it will become necessary for the DMD to match such pricing to capture market share. Cost modeling of microdisplays confirms that the DMD module can be sold profitably at prices approaching $100.

For LCOS suppliers to successfully compete in the television market, they must address the optics costs of their designs as well as demonstrate reliable supply at competitive prices. Given the aggressive pricing being adopted by both HTPS and DMD suppliers, this will be difficult. Further the probability of a LCOS success is lowered by the tendencies of the Japanese branders and integrators to favor HTPS and many of the Korean and Western branders to favor the DMD. LCOS suppliers are tending to focus on Chinese integrators who lack brand recognition and sales channels in developed countries. The forecasted market share for projection television is shown in Figure 3.

Figure 3. Projection Television Market Share by Technology

Conclusion

The near term health of the microdisplay industry is dependent on successfully penetrating the television market. At stake are up to 8 million rear and front projection televisions. The industry must address two stumbling blocks: lamp life and limited viewing angle to move forward. But to achieve success microdisplay projectors must be low cost and enable television street prices of $1000 to $1500. Microdisplay module pricing will be reduced to $200 in the near term and approach $100 per system in order to achieve a major success.