People are actually making money in the LCD panel business. Not long ago the bellwether 32-inch panel was being sold at or below break-even. Now, prices are up and, even though manufacturers have significantly boosted production, supply is not sufficient to satisfy the market demand for 32-inch LCD-TVs, sources at panel-makers told Max Wang and Emily Chuang for a story published in Digitimes yesterday.

Ken Werner
Senior Analyst and Editor

The production increases are not trivial. Monthly shipments of 32-inch LCD-TV panels from AU Optronics (AUO) and Samsung Electronics both grew by nearly 100,000 units to more than 500,000 during Q2. (Orders from Sony contributing to AUO’s increasing shipments, sources said.) Monthly shipments of 32-inch panels by Chi Mei Optoelectronics (CMO) in Q2 were 300,000-400,000 units.

The 32-inch WXGA LCD continues to be the largest-selling category of panel, followed by 50- to 54-inch WXGA PDP and 45- to 49-inch 1080p said Rosemary Abowd, VP of Pacific Media Associates. But only the 32-inch had a price that rose in the first half of July compared to the preceding half-month period. ASP increased $5 to $320, according to WitsView Technology. That price is still low enough to allow some first-tier makers to bring 32-inch TV sets in at about $1000, depending on channel and pricing strategy.

Although buyers are moving toward larger LCD-TV screens on average, Taiwanese panel makers believe 32-inch TV will remain the mainstream size over the next few years as they believe this a good size for a second TV.

How long can prices rise? Taiwan’s panel makers think pricing for 32-inch TV panels will increase steadily, while panels of 40 inches and greater may drop slightly. Monitor panels, by the way, are expected to rise by another $2 to $5, peaking in Q4.

So what’s the bottom line for 32-inch LCD-TVs? The panels for these sets have been under-priced for some time, so the increasing prices are not an aberration but a long-needed correction. That means that when it comes to 32-inch TVs from Tier 1 manufacturers, delaying your purchase may get you some improved technology but it will no longer get you a lower price.

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