Not Ready for Prime Time Panels

Standardized LCDs on the way-but not from everybody

by Barbara Jorgensen

Electronic Business, June 1, 2001 - The latest episode in Larry Mabe's recurring nightmare happened about two years ago.  A massive shortfall of liquid crystal displays (LCDs) had hit the industry, and as a display engineer for Compaq Computer Corp., Mabe's job was to minimize its effect on the Houston-based PC giant's notebook production. "When there's a big shortage you'll do pretty much what you have to do to ship product," he says.

In Mabe's case, that meant turning to as many as 10 different LCD suppliers, each with slightly different product specs. That, in many cases, meant redesigning part or all of the notebook's display assembly which included using various interface cables, plastic or magnesium enclosures, bezels, bracket assemblies and electromagnetic shields. It meant every new panel and every component associated with it had to be qualified by Compaq, a process that took months. And it required new tooling–— huge new molding systems–— to make all this stuff fit together.  Although Mabe declined to be specific, he admits that during this period Compaq missed customer-shipment dates and that sales were affected. And Compaq isn't alone: Former

Dell Computer Corp. Display Strategy Manager Mark Fihn estimates the Round Rock, TX-based company spent more than $5 million one year customizing tooling for display casings.  The problem–— shared by IBM Corp., Hewlett-Packard Co., Toshiba Corp. and other notebook makers–— was lack of a "drop-in" replacement for the panels these OEMs had designed into their products. Most had hooked up with a few approved vendors which, even when they upgraded their LCDs, maintained the same form factor. But when your vendors fall short on the panels you need, options are limited: redesign or perish. "It's a headache to redo your platform because each panel is different," says Fihn, now a principal with Austin, TX-based market research firm DisplaySearch.

So, after the Great Panel Shortage of 1999, Compaq, Dell and a few other heavy hitters convened the Standard Panels Working Group (SPWG), coordinated by DisplaySearch. The effort, says DisplaySearch president Ross Young, targeted only the electrical and mechanical specs of popular thin-film-transistor (TFT) LCDs, so panel makers could still differentiate themselves through factors such as color, performance and brightness.

Released in October 1999, Version 1.0–— the SPWG's first standard–— sets guidelines for the physical dimensions, mounting-hole tolerance, connector types and electrical and interconnection parameters for notebook TFT LCDs between 13.3- and 15-inches in diameter. The recently released 2.0 version expands the spec to include higher resolution displays.

But the issue is far from resolved. Not every panel maker has jumped on the standardization bandwagon, nor do they seem likely to. The large panel consumers–— Compaq, Dell, IBM, HP and Toshiba, which together account for more than 50% of the world's notebook PC market share–— all back the standards, but they claim that some panel makers remain "indifferent" to their needs.

"From the OEM standpoint, it's hard to figure any disadvantages [to a standard]," says DisplaySearch's Fihn. Standard LCDs mean OEMs have more suppliers to choose from, and they can expect a relatively stable flow of panels in the production line. It also means OEMs can carry fewer components, such as the connectors used in a display module. Carrying fewer component part numbers means more stable inventory and lower production costs.

But even standard proponents admit there is a downside for LCD makers. If multiple suppliers are competing over identical panel solutions, it will ultimately drive down prices. LCD makers also charge standardization encroaches on a factor they believe is a major differentiator: size. All have billions of dollars invested in existing production lines and–— at least until standard panels are universally adopted–— a captive audience.

Fihn warns, however, that this is a double-edged sword. "LCD manufacturers fear [standards] will make it more difficult to maintain a relationship once you are designed in. But it isn't easy getting designed in, and once you're there, you have the problems of shutting your customer down [during shortages or for quality problems]. Or you may end up sitting on this captive inventory if your customer closes down."

Pro-standard LCD makers believe supporting the SPWG's work will expand their market reach. "I think if we offer standard products, we can increase market share and save a lot of resources," says Davis Lee, vice president of sales for LG Philips LCD Inc., with U.S. headquarters in San Jose, CA.

Some that don't support the SPWG standard say it simply doesn't apply. Sony Corp., Tokyo, and NEC Electronics Inc., San Jose, for example, stress that they are targeting displays for smaller applications: cameras, projectors and personal digital assistants. Sony doesn't manufacture panels over 10 inches (diagonal), says a spokesman, and the SPWG standard is limited to 13.3-, 14.1- and 15-inch TFT LCDs. For its own portable computers, Sony sources FPDs from other vendors.

Apple Computer Inc., Cupertino, CA, won't comment on mechanical and other aspects of its panels, but said in a statement: "Apple supports industry standards whenever there is a clear customer benefit, such as I/O interfaces, memory and net-working connectivity. But in instances where that is not the case, the company prefers to focus on providing customer-oriented innovation and solutions." Apple points to its mega-wide, 15.2-inch display on its PowerBook G4, which provides more real estate for users such as design professionals.

Some in the industry believe the SPWG standards don't go far enough and should address manufacturing materials such as glass. Others are pushing for a standards effort for flat-panel monitors. Even without those challenges, there are a few headaches still ahead for folks like Larry Mabe. At Compaq, SPWG-compliant LCDs are being designed into new products; existing products remain as they are. "Right now, we are in the peak of the transition period," Mabe says. "There will be a time of turbulence and turmoil as [LCD makers] support both configurations."

(Reprinted with permission from Electronic Business)