Users looking for a new LCD (liquid crystal display) TV or desktop display could face higher prices in the coming months due to a recent sharp rise in demand.
The price of popular 17-inch LCD panels, the screen part of a monitor, rose 5.8 percent in the first half of August, compared with the previous two weeks, and another 2.7 percent in the second half of the month, according to WitsView Technology, an industry researcher.
The decline in prices for LCD TV panels, from 20.1-inch to 42-inch sizes, has also nearly been halted. The price of 42-inch panels declined 1.4 percent, but the price of other sizes remained flat to slightly down, a huge improvement over the past few months.
Users may have become accustomed to rapid price declines such as the ones the market has seen most of this year. Between April and June, for example, the price of large-sized LCD panels used in LCD TVs fell by over a quarter, compared with the first three months of the year, according to WitsView.
How the market has changed. Demand for new desktop PCs with flat displays, laptops, and LCD TVs normally picks up in the third quarter, as people in the Northern hemisphere return to work and school after summer breaks and vacations. Stronger demand this year is being met by a slimmer supply chain, and that could mean prices will continue to rise.
"I think prices will go up in the third and fourth quarter," says Eric Lin, an analyst at Yuanta Core Pacific Securities in Taipei.
August is actually the first month LCD panel prices will rise after three straight quarters of declines for 17-inch panels, according to iSuppli, another market research company. Seventeen inches is considered a key panel type because of its popularity in desktop displays.
The average price for 17-inch LCD panels will increase by 19 percent in the second half of the year, to US$123 (NZ$192) from US$102 (NZ$160) in July, iSuppli predicts.
For users looking for LCD TVs, says iSuppli, prices will still move lower, but not by much. Like other market researchers, it saw nearly stable to slightly lower prices for TV-sized panels, and that means there's little reason to put off a purchase to wait for better prices later in the year, because they won't be that much better.
The price declines earlier this year prompted LCD panel makers such as LG.Philips LCD and AU Optronics to announce plans to reduce production in order to avoid losses.
Analysts believe companies will expand production again as prices rise, which should help meet demand. But manufacturers will likely be conservative about building new factories, having being burned by rapid price declines earlier this year, meaning prices will likely continue upward despite added capacity.