3M is positioning itself on a new frontier

3M Co. has seen the future, and it is flat. Surging global demand for flat-panel displays on everything from cell phones to notebook computers and television sets has the manufacturer _ as well as nearly every other player _ scrambling to keep pace.

One of 3M's best-selling products has been the screen-brightening films that are applied to flat-panel liquid crystal display panels. While the optical films have been one of the company's hottest sellers for more than a year, the flat-panel market has reached a fast boil, with equipment makers investing in new production at record rates and wrestling with shortages of components such glass, color filters and backlight lamps.

The boom is the result of mass migration to the new technology, according to DisplaySearch, a flat-panel display market research firm. PC users are upgrading monitors and migrating from desktops to notebooks. Mobile phone users are trading up to new models with LCD screens, as are people with handheld computers. People with chunky, old cathode-ray tube televisions are replacing them with bigger and bigger flat-panel screens, as fierce competition for this bulls-eye lowers prices.

The result: What was a $32 billion market last year for thin-film transistor LCDs _ the dominant flavor of flat-panel displays _ will likely top $46 billion this year, DisplaySearch figures. The market for competing plasma technology flat-panel displays, while growing quickly, is much smaller.

"The combination of these things happening at the same time is really creating a tidal wave of growth," said DisplaySearch president Ross Young. "It's just amazing."

You don't have to tell 3M.

"This is a once-a-career opportunity," 3M vice president Andy Wong said. "We're running out of capacity and space in Japan, Korea and Taiwan."

Wong, 54, runs 3M's Optical Systems division from his office in Building 275 on 3M's campus, where much of the R&D on 3M's films is done. His challenge is to prove the lumbering $16 billion maker of Scotch-Brite scouring pads, Post-it Notes, creams for genital warts and thousands of other useful things that don't change terribly quickly can sprint in the chaotic, rapidly changing world of consumer electronics.

"It's a much tougher customer" in the LCD market, Wong said, noting that 3M reduces the prices it charges for its films every six months.

Led by sales of optical films for LCD panels, revenue in 3M's Display and Graphics segment jumped 38 percent in the fourth quarter last year. 3M last month upped its first quarter earnings estimates in part on continued strong optical film sales.

John Roberts, an analyst at Buckingham Research Group, estimates 3M's optical film sales will grow from a $700 million-a-year business to a nearly $1 billion business by 2006. About half of 3M's optical film sales last year were for flat desktop monitors.

A new factory 3M started two years ago near Shanghai for converting sheets of optical film to finished products was at capacity within one year, Wong said. 3M plans to have two more plants ready in China by year's end.

3M also has been expanding its factory in Alabama where workers churn out the sheets and rolls of 3M's multi-layer optical film. It's also expanding its Menomonie, Wis., plant, which produces micro-replicated film.

Shipments from both plants head to China, where workers cut and size the films and apply additional coatings. 3M then sells the films to backlight manufacturers and polarizer manufacturers such as Nitto Denko Corp. and Sanritz Corp. The polarizers, in turn, sell to LCD makers such as Samsung and LG.Philips.

The manufacturing race to maker cheaper, larger television screens has the industry in overdrive. Most flat-panel LCD televisions sold are in the 17- to 22-inch range, Wong said, but 50-plus-inch screens are in the offing.

The big screens mean more 3M material will be used, which is great for 3M. But the larger screens also demand more brightness, are viewed at many different angles and have stiffer contrast requirements. That means more work for 3M's R&D team.

In 3M's favor, the company has several hundred patents on the devices _ so many it doesn't matter that a few will expire in less than a year, the company argues. While other companies make display enhancements, such as Efun Technology Co. in Taiwan, real competition is nil, said DisplaySearch's Ross.

"It's hard to see any real chinks in their armor," Ross said. "3M has got a very strong position."

Trouble could brew if the explosion of LCD production leads to a supply glut _ something some industry watchers are predicting. Another challenge is whether manufacturers can shrink the prices of big LCD flat-panel televisions. There are competing technologies including less-expensive plasma, which doesn't use 3M films. Right now, a 42-inch screen LCD flat panel television from Sony will set you back anywhere from $9,000 to $13,000. Plasma versions typically cost about half that.

"What everyone is looking for is to get these large screen plasma and LCD displays down to $2,000 for a final price," said Ken Werner, editor of Information Display magazine. "At the moment, people are very optimistic."

600450 3M is positioning itself on a new frontier glassonweb.com
Date: 27 May 2004
Source: Menafn.com

See more news about:

Others also read

The glass sector has the increasingly widespread requirement of having an unlimited catalogue of parametric shapes and creating new ones in a simple way without being an expert in the field.
Shoaib Akhtar is going to be back on Indian TV screens. He is going to be featured in the new TV ad campaign for Asahi Glass.
Glass Confusion is starting the New Year with Beginning Fused Glass group classes. The three-week course will be held Wednesdays from 10 a.m. to 1 p.m. and again from 5 p.m. to 9 p.m.
Worldwide glass-substrate capacity is expected to continue to grow more than 40% each quarter through 2005, as a result of capacity expansion by existing glass-substrate suppliers and new companies joining the market, according to DisplaySearch.
Western Pennsylvania’s once-thriving glassmaking industry is dwindling, as did the domestic steel industry and for many of the same reasons: competition and cost.
Architects Robert and Esteve Terradas of Barcelona describe the city’s newly-renovated and expanded (45,000 m2) Science Museum (completed September 2004) as "a living museum that will set new standards in terms of transparency - a very modern construction that will enable the plants and animals inside to really live and breathe." The project was made possible by the use of an innovative grade of DuPont™ SentryGlas© Plus™ structural interlayer that is "UV-breathable, on the flat roof of an Amazonian rainforest exhibit".The UV-breathable 938 m2 laminated glass roof is rectangular in shape.

Add new comment