Prices for flat-panel monitors set to fall

For PC users casting a covetous eye over a TFT-LCD (thin film transistor liquid crystal display) monitor to replace their bulky CRT (cathode ray tube) monitor, now may be the right time to start thinking about an upgrade as prices on flat-panel screens are expected to fall in the months ahead.

TFT-LCD prices have soared more than 40 percent over the past year but analysts tracking the display market say prices will now head lower due to increases in production capacity.

The average selling price (ASP) for large-area TFT-LCDs -- greater than 8.4 inches in size -- reached US$270 during the second quarter of 2002. That represents a 42 percent increase over the same period last year, when the ASP for large flat-panel displays hit a low of $189, according to AU Optronics Corp., the world's third-largest TFT-LCD maker, in Hsinchu, Taiwan.

That reflects a trend across the entire TFT-LCD industry where the average price for 15-inch modules -- the actual display component of a flat-panel monitor -- rose 29 percent between September 2001 and June 2002, according to market analyst DisplaySearch. At the same time, prices for 15-inch LCD monitors, the most popular monitor size, rose 6 percent, it said.

With production capacity on the increase, prices for TFT-LCD modules are expected to fall and that will translate into lower prices for end users as vendors are likely to cut prices on 15-inch monitors, DisplaySearch said last month.

"We have much more capacity coming out this summer and in the second half of this year," said Sean Wu, a senior analyst at the Market Information Center of the Institute for Information Industry in Taipei.

Despite expectations of lower prices for TFT-LCD monitors, they still come at a hefty premium over their traditional CRT cousins.

Dell Computer Corp. -- which DisplaySearch tapped as the number one vendor of TFT-LCD monitors worldwide -- sells a 15-inch TFT-LCD monitor under its own brand for $429 on its U.S. Web site, with models available from other companies for $350. By comparison, Dell's Web site offers a 17-inch CRT monitor, which offers a viewable area that is roughly comparable to a 15-inch TFT-LCD monitor, under the Dell brand for $199.

Is that difference small enough to justify an upgrade? "For the user, it depends on what you need. The price (of LCD monitors) will definitely keep going down," Wu said.

TFT-LCD panel makers like Samsung Electronics Co. Ltd. and AU Optronics have an interest in seeing TFT-LCD prices fall further. With next-generation TFT-LCD manufacturing facilities coming online in the coming months, manufacturers want to see panel prices fall somewhat to spur the end-user demand that is needed to absorb this expanded capacity, Wu said.

"You have to make the prices lower to increase demand," he said.

But even as increased capacity leads to lower prices, the cost of TFT-LCD monitors will rise again if demand for flat-panel displays exceeds supply. That could happen during the second half of 2003 or in 2004, when demand for LCD televisions will be stronger and major PC vendors, such as Dell, start to push LCD monitors more aggressively, reducing the percentage of PCs that ship with a CRT monitor, Wu said.

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Sumner Lemon

Computerworld
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