Fri, Jul 02, 2004 - Page 10 News List

LCD TV, monitor prices to fall faster than forecasted


Prices of liquid crystal displays for monitors and televisions will fall faster than expected this year on rising inventories, market researcher DisplaySearch said.

Average prices of LCDs for monitors, which account for more than half of total demand, peaked at US$302 in May and will drop to US$282 by December, 5 percent lower than a May 19 forecast, Texas-based DisplaySearch said in its latest monthly price report. The researcher also cut its price forecasts for LCDs used in TVs, the fastest growing market.

The lowered forecast underscores concerns that consumers may be reluctant to pay up to US$5,000 for flat-screen TVs. That's the risk companies such as Samsung Electronics Co, LG.Philips LCD Co and other producers face as they build new plants that can cost more than US$2 billion each.

"Demand for LCD TVs may not rise until prices fall much lower than current levels," said Park Hyung-ryul, who helps manage the equivalent of US$1 billion at KTB Asset Management Co in Seoul. "The impact of lower margins because of price cuts will probably outweigh any impact of higher demand."

One of the world's top five LCD monitor companies last month canceled half of its orders for 15- and 17-inch screens because of rising inventories, while another company shifted some orders to glass-tube displays instead, according to Display-Search, which didn't identify the companies.

"The party finally ended," the June 29 report said.

"There will be little opportunity for price increases and these prices may never be seen again," the report said.

LG.Philips LCD, the world's second-largest producer, this week cut the price for its initial public offering as shares of the world's seven largest panel makers fell an average 10 percent in the past month.

Average prices of LCDs for monitors fell in June for the first time in a year and will drop every month till the end of the year, when they'll be at US$282 each, compared with an earlier US$298 forecast, it said.

LCD TV panel prices rose last month by an average of US$3 to US$557 each, compared with an earlier US$563 forecast, it said. Prices will fall US$10, or 2 per-cent, this month and drop to a lower-than-expected US$523 by December, the report said.

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