LCD prices to rise slightly until 2003

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LCD prices to rise slightly until 2003

A shortage in liquid crystal displays will keep prices for desktop and notebook displays at their current levels, or even a bit higher, until new factories come online in 2003 and increase supply.

This was the message from LCD makers at the Society for Information Display conference being held this week in Boston, USA.

Global demand for LCDs outstrips the current supply by about 4 million units, said a spokesman from Samsung Electronics. That shortage will cause the prices of all LCDs - including the ones used in TVs and handheld devices - to rise through the second or third quarter of 2003, he said. Samsung expects that prices on all LCDs will rise between $10 and $20 each per quarter, he added.

LG Philips LCD, a joint venture between LG Electronics and Koninklijke Philips Electronics, also expects shortages until the middle of 2003, according to a company spokesman. LCD prices have mostly stabilised for LG Philips, largely due to traditionally weak second quarter demand, he said. That could change in the third and fourth quarters of 2002, however, as those quarters are usually much stronger, he said, adding that the end of the year could see further shortages.

Both companies expect the shortages to ease, and prices to subsequently creep lower, as new manufacturing facilities come on-stream in late 2002 and mid-2003. Samsung will be opening a fifth generation plant in September or October, with LG Philips following in mid-2003, the spokesmen said.

DisplaySearch, a research and analysis firm that specialises in the display market, also expects prices to rise this quarter, but that rise should be the last one for a while, according to Barry Young, vice-president and chief financial officer of DisplaySearch.

As such, DisplaySearch is raising its forecast for LCD production, and expects that prices will come down, though the company is not sure when that will happen, Young said.

The rise in LCD prices has already hit some PC makers, with those costs being passed on to users. In March, Apple Computer said it would raise the price on its latest iMac by $100 due to the rising cost of LCDs.

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