THE FRONT LINE: JULY 2008
Epson: An Inside Look
Epson is the market leader in LCD projection. Last May, several journalists got a first hand look at how they got there.
The trip was scheduled so that myself and eight other CE journalists could visit the Epson Suwa Menami LCD panel manufacturing facility in Japan, which opened in 1985 and which now spits out 550,000 LCD panels a year for use in business and home theater projectors. While many people have used a LCD projector at one time or another, only a handful has actually seen the panel fabbing process.
This tour, and the 3LCD jaunt that preceded it in April, were the first organized press tours Epson has ever staged for its LCD projector business unit. Given the on-going battles between 3LCD technology and Texas Instruments’ DLP imaging system, it was probably a good time to educate editors and writers on LCD manufacturing.
I had previously toured TI’s DLP fab in Dallas, TX several years back as part of a visit arranged by InFocus. Back then, we had to suit up in special outfits to enter the Class 10,000 clean room environment and watched as DMD wafers zipped by on overhead tracks, carrying silicon to and from the photolithography, etching, washing, and mounting machinery — all automated.
Figure 1. Specialized machinery awaits installation outside Epson’s
Suwa Menami LCD fabrication line.
Things weren’t much different in Suwa Menami. We again dressed up in contamination-free suits (it was hot in those clothes!) and walked in groups to see individual chambers that enclosed the automated machinery used to apply photo resist to raw silicon wafers, etch those wafers, clean them, fill the LC compound, separate the individual panels (in this case, .7 inch 1920x1080p high-temperature polysilicon), mount them, and attach wiremold connectors for eventual installation in projectors.
There are 300 different steps to form an LCD wafer, and the process takes about 30 days from start to finish. Three such panels are needed for the optical engine in each projector, so the annual output from Suwa Menami is enough to build about 183,000 projectors. The actual wafers measure 8 inches in diameter and resemble futuristic waffles before the individual panels are cut apart.
Figure 2. Here’s a close-up view of a finished 8-inch LCD wafer, right out of the oven!
Figure 3. These are Epson’s latest D7 1920x1080 HTPS LCD panels,
and measure .7 inches diagonally.
In 2007, Epson also opened a new LCD fab in Chitose on the island of Hokkaido, which we were unable to visit. This fab, which will primarily build panels for business projectors, employs 250 workers, uses larger wafers (12”). and has greater capacity for annual production, although no specific figure was stated in our meetings.
The bulk of production from Suwa Menami is for home theater projectors and revolves around a D7-series panel. This panel has higher contrast and a larger aperture ratio than previous designs, passing more light from an equivalent lamp. The actual improvement in aperture ratio is currently specified at 54%, a 20% improvement over the company’s D3 panels of five years ago.
Our next stop was at Epson’s large Shimauchi plant in nearby Matsumoto, part of the Nagano region of central Japan that is dominated by snow-capped peaks reaching close to 8,000 feet. This facility, which manufactures a variety of products and also conducts research and development, employs about 6000 people.
Of Epson’s overall color imaging business unit, 85% is comprised of sales of printers, cameras, and media players. Projectors make up another 12%, with the remainder given to specialized PCs that print things like color coupons at grocery stores.
Figure 4. The press and Epson representatives gather outside the Matsumoto plant.
Figure 5. Here is a close-up view of the optical engine in an Epson 1080p home theater projector. Note the two transparent dichroic glass filters near the lamp (middle and upper middle).
Epson builds just about every component used in a projector, from the panels to polarizers, optical compensators, ballast and power supplies, and even lamps! The company’s exclusive E-TORL (Epson Twin Optimized Reflective Lamp) design provides increased illumination at lower power levels and is considered to be a “green” projection lamp technology.
The “green” concept is apparently quite important to Epson, as it is to other Japanese manufacturers. Initiatives are in place to minimize the use of hazardous chemicals, recycle water, process waste efficiently, reduce plant power consumption and in general minimize carbon footprints at all Epson plants.
We wrapped things up with a few presentations on the overall projector business and market share numbers. According to Rajeev Mishra, Epson’s director of new ventures, projector sales are forecast to hit 5.8 million units worldwide in 2008. Of that number, 5.2 million will be business projectors, and the remainder (about 600,000) will be home theater designs.
At present, 57% of all projectors sold use 3LCD technology, and Epson’s share of the market amounts to about 21%, putting them in first place by a substantial margin. Breaking down the numbers further, 46% of all home theater projectors sold in 2007 were 720p models, with 1080p capturing 23% of the business and 480p taking about 21%.
All of these stats sound great until you take a dose of reality pills and realize that front projection currently makes up a paltry 2% of the total home theater display market. Who’s in first? You guessed it — flat panel LCD HDTVs command 69.1% of all sales. The number 2 slot is occupied by plasma technology, far behind with 20% of all sales, while microdisplay rear-projection HDTVs account for 8.8% of the HT business.
Given current market trends, FP LCD’s share of the business isn’t going to erode, and will likely increase as the rear-projection segment continues to shrink and plasma continues to hold its own for a while. So the challenge for Epson (and every other home theater projector manufacturer) is to figure out a way to grow that 2%.
Figure 6. Epson’s demo room had the latest 1080p projectors from
Sanyo, Panasonic, and Sony lit up for comparison.
During one of the question and answer sessions, I ventured that the market share for home theater projectors would always be small compared to direct view display technologies. There are a few reasons why, one of which is the widespread availability of larger flat panel screens with lower prices. (You can now buy 50-inch plasma HDTVs for $1,500 and 52-inch LCD sets for $2,300 at wholesale clubs.) Another reason is the need for a two-piece system in a darkened room when projecting, as opposed to an all-in-one display that works just a regular television under any ambient lighting conditions.
Epson’s $6,999 Ensemble home theater system was evidently designed to overcome some of those obstacles. Ensemble combines Atlantic Technology speakers into a 100-inch, matte-finish motorized projection screen for the front three channels in a Dolby Digital 5.1 system, with the rear surrounds built into the 1080p projector housing. A switcher/scaler/control box with DVD player completes the package. (The Ensemble Web site lists the projector as being a 720p model.)
Will Ensemble be successful in expanding projector sales? It’s too early to tell, but my educated guess is that (Ensemble or not) it will be a difficult task for Epson to grow the market for home theater projectors much past 4% — double what it is now, but still small compared to sales of flat panel products.
Even so, the Epson roadmap for HTPS LCD that we saw calls for 4K and ultimately 8K LCD panels by 2025, which would make for one heckuva home theater system! If this Web site and I are both still around 13 years from now, I’ll check it out for you…
This article also appears in the July 2008 issue of Pro AV magazine.
