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Display prices going up

After a steep decline in liquid crystal display prices in 1998, many of the world's largest display makers are looking to hike prices between 30 and 40 percent in '99.

After a steep decline in liquid crystal display prices in 1998, many of the world's largest display makers are looking to hike prices between 30 and 40 percent in 1999.

Toshiba, Sharp, NEC, and Sanyo are among the Japanese LCD makers that have said they plan to boost prices in the coming months based on unexpectedly strong demand for flat panel displays and notebooks.

For notebook buyers, the initial effect is likely to be minimal as notebook manufacturers absorb the price increases. Longer term, screen supply could tighten up, affecting notebook availability.

A Toshiba spokesman said his company planned to raise prices of thin-film-transistor liquid crystal displays (TFT-LCDs) for volume buyers by an average of 20 percent in the April-June period. Toshiba had already raised prices by 15 percent in the current quarter, although this was offset in the case of exports by the yen's strengthening against the dollar, he said.

A Sharp spokesman said his company was also seeking to raise prices of its LCDs between 25 percent to nearly 30 percent. Other companies are planning similar price hikes.

"It's very difficult to make profits at current price levels," he told Reuters. "This [price increase] is basically an adjustment from an earlier fall in prices."

And what a steep fall manufacturers endured in 1998--according to research firm DisplaySearch, average display prices dropped over 50 percent in 1998 due to industry-wide oversupply and currency devaluations.

The prices of a 12.1 inch active matrix sold in volume averaged 42,000 yen ($364) in March of last year but fell sharply to $259 in June, before recovering to around $299 at present, according to industry sources. The firming of LCD prices will move manufacturers from the red into the black in 1999.

DisplaySearch president Ross Young is predicting the market for active matrix displays-the variety increasingly being used in new notebooks--will grow revenues 51 percent in 1999 to $5.54 billion and 28 percent in 2000 to $7.08 billion.

However, because many LCD manufacturers scaled back investment in new plants last year, supply could be constrained in some of the larger screen sizes especially. To secure a certain volume, notebook manufacturers will have to accept some price hikes, an official at a Taiwanese PC company told the Nihon Keizai Shimbun, a major Japanese business paper.