Flat-panel prices drop as popularity rises

New research has found that LCD monitors more than doubled their sales last year, as prices continue to drop

Sales of flat-panel displays more than doubled throughout 2002 as increased supplies led to price drops, according to new figures from market researcher iSuppli, underscoring the trend that is seeing traditional CRT monitors losing out to liquid-crystal displays (LCDs).

LCD supplies increased throughout the second half of last year, as manufacturers -- particularly Korean companies such as Samsung and LG -- aggressively built new fabs capable of manufacturing larger, cheaper LCDs, iSuppli said. Supply outstripped demand and prices fell as a result, making LCDs more attractive to many buyers.

LCDs are mostly seen in laptop computers, but are becoming increasingly popular as monitors for desktops because they take up less space than CRTs and are more attractive aesthetically, iSuppli said. Although many individuals and businesses aren't currently in the market for a new PC because of economic instability, they are still willing to upgrade their monitor, the company said.

US market penetration of LCDs grew from 13 percent in the fourth quarter of 2001 to nearly 36 percent of all monitor sales in the fourth quarter of last year, iSuppli said. Shipments increased 32.2 percent from the third to the fourth quarters of last year alone.

At the same time, the number of LCDs sold in the US throughout 2002 declined 23 percent compared with 2001. 2002 sales totalled 24.3 million compared with 2003 sales of 33 million.

"The main trend is the increase in capacity of LCD panel manufacturing, particularly in Korea, which is driving the prices of LCDs down," said Andrew Murray, analyst with iSuppli/Stanford Resources. "That makes LCD monitors a very attractive alternative to the CRT monitor."

Murray said that Asian companies are now building sixth-generation fabs capable of manufacturing larger panels, which brings down the price per square inch. A major motivation for building these plants is the prospect of being able to build affordable LCD televisions for the consumer market -- in which large size is a primary selling factor.

"It's not just the computer monitor marketplace they are looking at, but LCD televisions as well," Murray said. "That TV market in the future is behind a lot of their thinking."

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