A string of new LCD factories being built, combined with slow demand for notebook and desktop PC screens, caused LCD prices to fall during the first three months of the year, and the downward trend is expected to continue.
Falling prices for LCD screens should help ensure that users find bargains for new monitors, laptops, and LCD TVs this year, since the screen is among the most expensive components in those products. The price declines are also causing vendors to improve picture quality to catch users’ eyes and draw them away from competitors.
Makers such as LG.Philips and Samsung Electronics, the world’s two largest LCD producers, are ramping up production at state-of-the-art factories, while rivals continue to add new lines at existing plants.
“The biggest impact from the new plants will be in the first part of this year, but there will be some impact throughout the year,” said Frank Lee, an LCD industry analyst for Deutsche Securities Asia in Taipei.
Bigger Screens, Smaller Prices
The new LCD plants were built largely to keep pace with demand for LCD TVs, which have been among the hottest selling items this year. Cutthroat competition among LCD makers has also been a boon to users, ensuring steadily falling prices for the past few years, even as screen sizes increase.
For example, prices for 42-inch LCD screens that will be delivered to TV makers in the second half of April fell by $35 each since the end of March, to an average of $890, according to WitsView Technology, an industry researcher. Prices for 19-inch panels for PC monitors fell $5 to an average $160.
Average selling prices for LCD panels at AU Optronics fell nearly 12 percent quarter-on-quarter by the end of March. The company expects the price of screens used in desktops and laptops to drop by around 10 percent quarter-on-quarter during the April to June period.
Market
LG.Philips said its sales declined in the first quarter compared to the fourth because of a decline in the average selling prices in LCDs destined for laptops and desktop monitors, with an overall price decline of around 10 percent for all LCD screen products.
The company is increasing production at a state-of-the-art LCD factory in Korea, as is rival Samsung. AU is building a similar plant in Taiwan that it expects to be in production by the third quarter of this year. LG said it would produce mainly 42-inch and 47-inch screens at the plant, aimed at the LCD TV market.
Other LCD industry competitors are also increasing production to keep up with demand for LCD TVS. On Wednesday, S-LCD, the LCD panel manufacturing joint venture of Sony and Samsung, said it plans to invest a further $238 million to expand production at its factory in Tangjeong, South Korea.