LG Philips LCD Co and other liquid crystal display makers' increased output of screens for televisions and computer monitors will result in supply exceeding demand by 1.8 percent this year, researcher Isuppli Corp said.
LG Philips LCD, the world's largest LCD maker and other producers will cut up a combined 10.9 million square meters of glass into screens measuring more than 10 inches diagonally this year, compared with 10.7 million square meters of demand, Isuppli analyst Vinita Jakhanwal said in a weekly newsletter.
LG and producers such as Samsung Electronics Co are investing in factories to produce more screens at a time, betting that consumer appetite for larger televisions and monitors will grow. The rush to produce more screens means LCD prices are more likely to begin sliding this month, Isuppli said last month.
"Prices are too high right now and they're likely to fall as competition intensifies," said Jeon Woo-dong, who helps manage the equivalent of about US$350 million at KB Investment Trust Management Co in Seoul, including Samsung Electronics shares.
"It's not time to worry yet but it does look like things may slow down later this year," he said.
Samsung Electronics, the world's second-largest LCD maker, said last month it expects a 1.1 percent shortage in supply during the first half of the year and 0.5 percent oversupply in the latter half.
Underscoring surging demand for flat screens, average selling prices of LCDs increased every month last year from March, according to market researcher DisplaySearch, which forecasts the market for LCDs measuring more than 10 inches diagonally will rise an average of 23 percent annually to US$48.8 billion in 2007.
This year, producers will bring online 11 so-called fifth-generation plants, two sixth-generation plants and Samsung Electronics' seventh-generation line, Jakhanwal said.
A fifth-generation plant can cut up three 32-inch screens at a time, compared with eight by a sixth-generation line and 12 by a seventh-generation plant.
Prices of LCDs for televisions as wide as 32 inches diagonally may fall 1 percent to 2 percent this month and continue to slide each month until June, Isuppli said.
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