[MacUser] Will Flat Panels Be?

VKN vkn at afrigeneas.com
Thu Nov 20 14:10:28 EST 2003

Flat-panel TV supplies thin
Tech industry fears holiday shortage

The Atlanta Journal-Constitution

LAS VEGAS -- A shortage of flat-panel display screens, one of the
fastest-growing trends in the technology business, threatens to pinch the
industry's budding comeback.

A few years ago the sleek screens were an expensive rarity, but their new
popularity in everything from computer monitors to television sets left
suppliers unable to keep up with the demand.

That could drive up computer prices and make consumers wait for back orders
just as the holiday shopping season is set to begin.

"There's been a shortage since the second quarter," said Ross Young,
president of DisplaySearch, an Austin, Texas, research firm. The shortage
was worst in the third quarter, he said, when demand outstripped supply by 5

That was just when sales of notebook computers soared and electronics
companies were churning out their holiday season inventory.

The screen shortage has eased since then as new manufacturing plants have
opened in Asia. But the problems the supply dip created are just now
reaching consumers.

Some retailers are bracing for shortages of big-screen and other flat-panel
television sets and computer monitors as the holiday shopping gears up, said
Jennifer Gerlach, an analyst with technology research company ARS Inc.

And computer makers, who are counting on sales of notebook computers and
televisions to bring them out of the technology downturn, are considering
raising prices and are scrambling to make sure they have enough supply to
meet expected demand in coming months.
Michael Sanders of Brookhaven prices flat-screen TVs at Best Buy at
Perimeter Mall on Wednesday. He's looking for a 17-inch screen to hang on a

"Flat panels and LCD [liquid crystal displays] are at the top of the minds
of everybody right now," said Dell Inc. Senior Vice President Rosendo Parra.
Parra, co-manager of Dell's Americas business, said he spent a good part of
his time at the annual Comdex technology conference here talking with
suppliers and others on the issue.

Officials from Hewlett-Packard Co. and other companies also said they were
worried about flat-screen shortages.

Because of the strong demand, prices for flat panels to manufacturers have
increased about 20 percent over the past year, Young said. The price of a
15-inch laptop screen, for instance, costs a typical computer maker about
$205 today, vs. $170 earlier this year.

Until now, computer makers have postponed passing along those price
increases to consumers, in part because they were offset by decreases in
prices of other components such as semiconductors.

At the same time, computer makers didn't want to endanger a fragile business
recovery buoyed by sales of notebooks and other high-end products.

Notebook sales soared by 16 percent between January and September, according
to research firm NPD Group, driving a long-awaited general rebound in the PC

But pricing policies are likely to change if demand continues as expected.

"Pricing is the great equalizer of supply and demand," said Parra, adding
that the company would raise prices on flat-panel products rather than risk
running out of them and forcing potential customers to go elsewhere.

Along with notebook computer sales, driving the soaring demand for flat
panels are a growing number of new products built around the screens, from
DVD players in minivans to trendy thin computer monitors, tablet computers,
digital video cameras and other gadgets.

At Comdex here, Dell took the wraps off a third LCD television model. Rival
Gateway Inc. has rolled out a dozen flat-panel television sets, mostly in
the past year. And traditional TV makers such Sony Corp. and Samsung
Electronics Co. are seeing flat-panel TV sales soar.

DisplaySearch estimates shipments of LCD TVs have increased by more than 160
percent and will continue to grow dramatically.

The good news, DisplaySearch's Young said, is that the new factories in Asia
should help bolster supply in the future.

Sony and Samsung, for instance, announced a $2 billion partnership to build
an LCD panel plant last month. And two weeks ago, NEC Corp. and SVA Co.
announced a similar partnership.

While the two giant plants won't help with supply problems immediately, they
will when they're open, probably next fall.

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