TFT LCD makers to boost production

TFT LCD makers to boost production

Several makers of TFT LCDs (thin-film transistor liquid crystal displays) will boost their production over the next six months, but a shortage in the flat-panel screens should continue into next year, people familiar with the companies plans said here last week.

Representatives at Matsushita Electric Industrial and Hitachi said they are each earmarking new money to increase production of TFT LCDs, which are used in notebook PCs and increasingly as displays for desktop PCs.

"Since demand is going up we have to increase our capacity," an official at Tokyo-based Hitachi said.

An over-capacity in TFT LCDs last year hit the vendors hard, dropping prices of the screens to record lows. Now, however, the market has reversed - tight screen supply has allowed most major producers to boost screen prices over the past few months. A standard 12 inch TFT LCD module in the second half of last year averaged $US250 and is now selling for about $320, according to Hiroyuki Yoshida, a research manager at market researcher IDC Japan. By late this year, a 12 inch screen is expected to be priced about $350, Yoshida estimated.

Some vendors are now ramping up production to meet fresh demand. Others, however, are more cautious, holding their investment level until they can better read whether the demand will last, officials at the companies said.

The upshot will be a steady growth in screen supply, according to IDC's Yoshida. By year's end, worldwide production of TFT LCDs will reach 36.5 million units, up from 26.1 million units in calendar 1998.

Yoshida predicted that prices should flatten out later this year, while TFT LCD supply will continue to lag demand into next year, he said.

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