El Segundo (CA) - If you are planning to purchase a 17" display this year, this is the time to buy, analysts believe. Tight supply of 17" panel supply will cause prices of large-size LCDs to increase in the near term, according to a report released by market research firm iSuppli.
Prices for LCDs have been falling for several years and there is no indication that this trend will change in the long run. For 2005, prices for screen sizes of more than 10"es and especially for the popular 17" size however could increase by as much as 10 percent, analysts of several market research firms said.
According to a report from iSuppli, new production capacity has trouble keeping up with due to increasing demand for panels from the desktop PC monitor and LCD-TV markets. Effects already were seen early this year, when the overall supply of large-sized LCD panels exceeded demand by 3.1 percent in the first quarter. This margin will narrow to 2.4 percent in the second quarter, before rising to 4.8 percent in the third quarter and to 6.1 percent in the fourth quarter, iSuppli predicts.
The firm said that the slow ramp-up of new fabs resulted in only 2.8 percent growth in overall large-sized LCD panel unit supply in the first quarter, which is contributing to the tightening in availability in the second quarter. As the factories progress with their ramp ups, unit supply is expected to increase at an accelerating rate, rising by 7.4 percent in the second quarter, 12.5 percent in the third quarter and 20 percent in the fourth quarter.
For all of 2005, supply of large-sized LCD panels will amount to 193.1 million units. In contrast, worldwide demand for large-sized LCD panels will add up to 184.7 million units, iSuppli said.
Contributing to the constraints are shortages of building materials. iSuppli said earlier this year that supply of glass substrates for large-sized TFT-LCD panels with sizes of 10 inches and more is expected to fall 8 to 10 percent short of demand in the second half of the year. In addition to that, color filters used for fifth- and sixth-generation LCD fabs are forecasted to experience shortages of 7 to 12 percent in the fourth quarter. Further shortages are predicted for polarizers, TAC film and lamps.