About 60-70 % market for display devices is still untapped

A leading manufacturer of LCD, Deepakshi Display Devices Pvt Ltd has been offering customers extensive ranges of energy meters, standard character and graphic LCD modules for the last 15 years. Its managing director D Malakar speaks to Saurabh Sharma of Electronics Bazaar about the display devices market and the new developments taking place in this sector

EB: How large is the market for dis­play devices?

Liquid crystal displays (LCDs) have many different applications like industrial, consumer, automobile, defence, etc and each segment has its own specification as per the applica­tion. In the industry, the chief areas that display demand for LCDs are telecommunications, energy meters, medical instruments, and various instrumentations. The telecommuni­cations and energy meter markets are volume driven and have tremendous potential in India. The current require­ment for LCD energy meters is huge and we expect a demand of 44 mil­lion pieces this year alone. The same demand is present in the telecommunications domain too. Last year, the total purchase of clip phones was almost 3 million pieces, which is expected to increase this financial year. We have seen quite an increase in LCDs for automobile industries in the last few years.

Display devices represent a colos­sal market as India is a huge country and the demand for coloured TVs is rising. About 60-70 per cent of the market is still totally untapped and the section that has been covered needs replacements! The consumer mar­ket as well as corporate consumers exhibit a massive demand for these display devices. Even the government is installing these devices in various sectors due to their long life and good quality. So, that should give you an idea about the almost infinite poten­tial that lies in this market.

In the future, cathode ray tube (CRT) will be phased out due to the depreciating prices of LCDs. The ear­lier rejection rate of LCDs was 30-40 per cent but it has now fallen to 10 per cent. We are currently striving to bring it down to 1-5 per cent. In the next three years, the price of LCDs will go down even further. Currently, an LCD TV in China costs approximately 275 US$ (Rs13,000-15,000). In India, the same TV is being sold at more than Rs 25,000. Once the Indian manufactur­ers start manufacturing these devices in on a larger scale, the prices will de-escalate here as well.

EB: Is Deepakshi looking forward to capturing the market? What strate­gies are you applying to make that happen?

Presently, we are producing small dis­play devices for the telecommunica­tions sector, electronic instruments, etc. We are now looking to venture into thin film transistor (TFT) tech­nology, with regards to which, we have tied up with a Japanese firm. Initially, we will be distributing the mentioned company’s products but later, we will start manufacturing TFT screens as well. We cater chiefly to industrial applications but we wish to enter the consumer electron­ics sector now.

We have undertaken numerous design projects for original equipment manufacturers (OEMs). Also, we are handling exclusive projects for some automobile firms.

EB: How much manufacturing is tak­ing place in India?

In India, unfortunately, there are only two lone LCD manufacturers—one is Sony, which manufactures in Hy­derabad. The other is Deepakshi. We manufacture these display devices at our manufacturing unit in Baha­durgarh. The rest of the LCD players in India are trading companies that merely buy and sell products.

EB: Can Indian manufacturers com­pete with foreign ones?

In India, this is not a very big indus­try, so we have to train our manpow­er, which is an arduous undertaking. The training is conducted for six months to one year and adds heavily to our expenditures. Raw materials, too, adds to our expenses. Since there are no local manufacturers making raw materials in the country, all the components and inputs have to be imported from other countries. Due to this, we have to stock inventories of up to one month, which eats into our finances. All these factors make us less competitive in the global market as the cost of our products becomes higher.

However, manufacturing in India does have its own advantages as local manufacturers can provide customers withsalesservicesandprompttechnical assistance,somethingthatisnotpossible in the case of imported goods.

EB:Where do you visualise the market in the next five years?

The display devices market will sus­tain itself through continuous demand for at least 15 more years. Even the current economic scenario hasn’t made a dent on this market. This year, tenders for 44 million LCD energy meters were issued by the electricity department and this segment counts for only 20 per cent of the entire LCD market, making the gigantic size of the market quite evident.

EB:What are the current trends in the display devices segment?

Currently, LCD displays are ruling this market. Now, organic light emitting diode (OLED) display devices are also entering the market. OLEDs are very thin in comparison to other LEDs, their total thickness being just 5mm. Also, LEDs are now available with dual side display devices, enabling users to view them from both sides.

EB: Which foreign countries display demand for the India made products? Are you targeting them?

Most countries have begun to recog­nise the quality of Indian products, so they are opting for India made prod­ucts. However, in our sector, as the cost of Indian products is very high, we are not trying too hard to export. We are currently exporting only 4-5 per cent of our products. Neverthe­less, in the future, we do plan to target European markets and have started to work towards that goal. Brazil is also a big potential market for us.

EB: What challenges do you face?

The biggest hindrance we face as manufacturers is the lack of local components for LCDs. We have to import everything from places like US, Taiwan, Europe and China. The government should encourage the players to manufacture com­ponents in India and should make technologies available to players at lower rates.

The other encumbrance is the bank rate. In India, the bank rate is as high as 13.5 per cent, whereas, in countries like China, the bank rate is as low as 4-5 per cent. Moreover, they do not have to stock inventories as everything is readily available to them in a short period of time. In India, we have to store inventories of up to one month, which turns out to be very expensive for us. The government should take necessary actions to solve these problems.

EB:What are your strategies for future growth?

We are diversifying our business by adding new offerings to our product line. We have commenced work on LED lighting projects. We are mostly targeting high power LEDs for street lighting and have currently designed 10W-16W LEDs. We are actively in­volved in R&D for this segment and are innovating various technologies to make LEDs more efficient.