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LCD prices 'on the rise'

Turnaround in the market

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 17in LCD panels, the screen part of a monitor, rose 5.8 percent in the first half of August, compared to the previous two weeks, and another 2.7 percent in the second half of the month, according to WitsView, an industry researcher.

The decline in prices for LCD TV panels, from 20.1in to 42in sizes, has also nearly been halted. The price of 42in 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 fourth, compared to 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 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," said 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 17in panels, according to iSuppli, another market research company. The 17in size is considered a key type of panel because of its popularity in desktop displays.

The average price for 17in LCD panels will increase by 19 percent in the second half of the year to $123 (about £65) from $102 (£54) in July, iSuppli predicted.

For users looking for LCD TVs, iSuppli said prices will still mover 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.

In fact, there is more likely upside to prices than downside, analysts say. 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. A number of panel makers also revised their capital spending plans for this year and next year to take into account the weaker prices.

Analysts believe the companies will expand production again as prices rise, which should help meet demand. But LCD panel makers will likely be very conservative about building factories after being burned by the rapid price declines earlier this year, meaning prices will likely continue upward despite added capacity.

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