Global flat-screen makers can take a breather after a severe glut in the past quarter owing to a spike in demand for liquid-crystal display (LCD) monitors for computers as prices for the slim monitors approach a sweet point, a local research house said yesterday.
"Prices of some LCD monitors have fallen to a record low recently and are approaching the level which will trigger strong replacement demand for traditional bulky cathode-ray tube (CRT) computer monitors starting in the fourth quarter," said David Hsieh (謝勤益), an analyst with DisplaySearch in Taipei.
In the third quarter, AU Optronics Corp (友達光電), the world's No.3 flat-panel maker, reported a 20-percent setback in sales to NT$38.75 billion from the previous three months as a surfeit in panel supply has hurt prices.
In line with a drastic 30-percent decline in panel prices, a 17-inch flat-screen monitor now costs about twice as much as a 19-inch CRT monitor, reaching an attractive level for end-users to switch to flat-panel monitors, Hsieh said.
In North America, the world's largest computer market, retail prices for 17-inch LCD monitors have slid around 15 percent, or US$72 per unit, to US$398 recently, Hsieh said. In April, the price was still at US$470 on average, he added.
Hsieh said he expected LCD monitors to make up half of the total 132.2 million computer monitors sold this year, up from 42 percent last year. The market penetration will further expand to about 66 percent of the total shipment of 144.8 million monitors next year, he forecast.
Sixty-five percent of flat-screen panels are expected to be used for computer monitors this year, while 11 percent will be for slim-screen televisions, according to DisplaySearch.
"Demand is not as weak as most have expected," Hsieh said. "We believe the growth in the final quarter will be very strong, helped by the Christmas shopping spree."
In the quarter ended December, global shipments of LCD monitors are expected to jump 16 percent to 20 million in the final quarter of the year, from 17.5 million in the previous quarter, DisplaySearch said.
The seasonal demand is expected to alleviate the oversupply of flat panels in previous quarters, Hsieh said.
He predicts panel supply could exceed demand by 10 percent in the fourth quarter.
The situation will further improve to around 7 percent as the price-driven demand is expected to carry into the first quarter of next year, Hsieh said. As a result, global shipments of LCD monitors are expected to reach 20 million units in the traditionally slack first quarter next year.
In contrast to DisplaySearch's upbeat projection, analysts such as Tim Chen (
"We're still watching whether the low-pricing strategy will whet end-users' appetite for new LCD monitors during the Christmas shipping season," Chen said.
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