Prices rose in 2003 amid demand for LCD panels for use in monitors, notebook computer screens and the latest craze: flat-panel televisions.
"We see supply of LCD panels beginning to loosen from the shortage we saw the last three quarters of last year," Ross Young, president of research firm DisplaySearch, said last Friday.
LCD panels allow for thinner, lighter display units compared with traditional cathode-ray tube devices. Worldwide revenue for LCD panels is expected to reach $47bn (£25bn) in 2004, up 32 percent from last year, according to earlier research from iSuppli. In 2003, the worldwide LCD market rose 27.9 percent to $35.7bn, the research firm said.
The majority of LCD panels that are 10 inches or more in diagonal width are used in computer monitors, Young said. But suppliers focused on notebook and TV applications last year because those products have higher profit margins, he said. Monitors "sort of got the short end of the stick during the shortage," he added.
Thanks partly to decreased demand for televisions after the holiday season, prices for large LCD panels for televisions are falling, Young said. But the average price for 15-inch panels for monitor use is expected to climb from $218 in January to $224 in March, he said.
Not surprisingly, that's translating into continued price increases in actual monitor products in the United States. "Those prices haven't started going down again yet" on average, said Samantha Nebrich, an analyst at iSuppli/Stanford Resources. Nebrich said that after steady declines in what it cost to buy an LCD monitor, prices started rising in the third quarter of 2003. The average price of a 15-inch LCD monitor in the United States in the fourth quarter was $327, up from $302 in the third quarter, Nebrich said.
A reversal in the pricing trend will probably happen in the latter half of this year, she said. That prediction is in keeping with DisplaySearch's forecast for increased LCD panel supplies. Young said the first quarter should see a 2 percent surplus of panels in the market, and that should expand to 4 percent in the second quarter and 5 percent in the third quarter.
Key to additional supplies is a major increase in capacity from LCD panel suppliers, which include Samsung. Young said suppliers are set to invest $10bn in new equipment this year, which is 50 percent more than the greatest amount ever invested in a single year.
