Case Study One

Topics: Flat panel display, Cathode ray tube, South Korea Pages: 2 (673 words) Published: May 15, 2013
Case Study One: Flat Panel Televisions and
the Global Economy
They begin as glass panels that are manufactured in high-technology fabrication centers in South Korea, Taiwan, and Japan. Operating sophisticated tooling in environments that must be kept absolutely clean, these factories produce sheets of glass twice as large as king size beds to exacting specifications. From there, the glass panels travel to Mexican plants located alongside the U.S. border. There they are cut to size, combined with electroniccomponents shipped in from Asia and the United States, assembled into finished TVs, and loaded onto trucks bound for retail stores in the United States. It’s a huge business. In 2006, U.S. consumers spent some $26.4 billion on flat panel TVs, a 63 percent increase over the amount spent in 2005. Projections call for U.S. sales to hit $37 billion—despite the fact that due to intense competition, prices for flat panel displays have been tumbling and are projected to continue doing so. During 2006 alone, prices for 40-inch flat panel TVs fell from $3,000 to $1,600, bringing them within the reach of many more consumers. In 2007, half of all TVs sold in the United States will be flat panel TVs. The underlying technology for flat panel displays was invented in the United States in the late 1960s by RCA. But after RCA and rivals Westinghouse and Xerox opted not to pursue the technology, the Japanese company Sharp made aggressive investments in flat panel displays. By the early 1990s Sharp was selling the first flat panel screens, but as the Japanese economy plunged into a decade-long recession, investment leadership shifted to South Korean companies such as Samsung. Then the 1997 Asian crisis hit Korea hard, and Taiwanese companies seized leadership. Today, Chinese companies are starting to elbow their way into the flat panel display manufacturing industry. As production for flat panel displays migrates its way around the globe to low-cost nations, clear...
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