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LCD screens to be in short supply

Liquid crystal display screens used in notebooks and desktop monitors will be in short supply until early 1999.

Liquid crystal display screens used in notebooks and desktop monitors will be in short supply until early 1999, continuing to affect the availability of laptops, according to a market research firm.

After that, however, a glut in the screens will drive down typical notebook prices by $400 to $500, DisplaySearch predicted.

The excess capacity results from massive investment by Korean manufacturers in new plants, according to Ross Young, president of DisplaySearch. "The Korean companies like LG Semiconductor and Samsung have been spending more money [than Japanese companies]. LG spent five times their revenue on capital investment, and Samsung spent 100 percent of their revenues, so they are clearly in the market for the long haul."

Samsung will become the world's largest producer of active matrix LCD displays by 1999, displacing the joint Toshiba and IBM manufacturing venture, according to Young. LG is expected to move from the No. 7 spot to No. 5 in production.

While display prices are expected to fall dramatically in 1999, most notebooks will be shipping with 13.3-inch displays and more companies will be offering 14.1- and 14.2-inch screens.

The market for 13.3-inch panels is expected to be 54 percent of first-quarter 1999 panel shipments, according to DisplaySearch. The majority of these screens will find their way into notebooks.

The cost of 12.1-inch displays is expected to fall 30 percent over the next two years, resulting in a $400 or $500 decline in the retail price of an average notebook, according to the report.

In the last two years, the notebook market has moved rapidly to larger screens. A typical notebook computer now has an 11.3-inch display, and many offer a 12.1 inches.

Because of how displays are made, production was basically halved when notebook manufacturers moved to larger screens, Young said.