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LCD panel crunch seen as demand rises

Surging demand for laptops, TVs and PC monitors are creating a shortage of the most popular sizes of LCD panels. Expect price increases on popular items, an analyst says.

Surging demand for notebook computers, televisions and desktop PC monitors have spurred a shortage for the most popular sizes of liquid-crystal display panels.

In a report published Monday, iSuppli/Stanford Resources analyst Rhoda Alexander said the shortage is leading to price increases for the holiday season.

"Capacity now coming online from fifth-generation LCD fabs (fabrication plants) is being sucked up in a perfect storm of panel demand," Alexander wrote. "The shortage is heavily impacting the 15- and 17-inch panel sizes."

LCD technology allows for much thinner displays than traditional cathode ray tube (CRT) display technology. LCDs are becoming more and more popular with consumers. Worldwide shipments of LCD televisions hit 734,000 in the first quarter, up 223 percent from the first quarter of last year, according to market research firm DisplaySearch. And despite a general downturn in shipments of desktop monitors, shipments of LCD monitors surged in the first quarter of the year, DisplaySearch found.

Traditional computer companies are getting into the LCD TV business. Dell has introduced a multifunction LCD television and computer screen, and Gateway has launched several plasma and LCD televisions.

Wireless technology company Motorola recently announced a partnership with Hong Kong-based display manufacturer Proview International Holdings to create products such as LCD and plasma televisions.

iSuppli/Stanford Resources' Alexander said that prices of some 15- and 17-inch LCD monitors already have begun to increase in recent weeks. The cost of 15-inch monitors, which had fallen below $250 at the street level, is back in the $300-and-higher range for many products, she wrote. What's more, 17-inch LCD monitors below $350 largely have disappeared, she said.

"Holiday shoppers are in for some sticker shock if they formed their wish list while looking at the prices in the midsummer advertisements," Alexander wrote.