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LCD crunch may raise device prices

A shortage of a key component in making liquid-crystal displays will likely lead to higher prices and lower supplies in popular tech products, a report says.

A worldwide shortage of a key component in making LCDs is likely to lead to a price increase of popular tech products, according to a report from research firm Provizio.

Flat-panel display manufacturers, which use LCDs (liquid-crystal displays), have been expecting shortages since the beginning of the year, but Boise, Idaho-based Provizio said in a report released Friday that the shortfall may also affect other markets.

The inadequate supply of motherglass--the large panel that certain displays, such as LCDs, are cut from--will probably lead to shortages and increased prices for notebooks, handheld devices and cell phones.

The motherglass shortage could last into 2003, Provizio Chief Executive Tim Rhodes said.

"We saw the same sort of thing happen in 1999 when there was a shortage that hung over into 2000, and production ramped up and there was an oversupply in 2001," Rhodes said. "This year, we'll see a shortage and a slow recovery in 2003."

The shortage is the result of the popularity for products with LCD displays, including notebooks, televisions and handhelds. In January of 2000, global demand was for 600,000 square meters of motherglass; it increased to 810,000 square meters by the end of that year, Rhodes said. Demand for motherglass has been growing 10 percent each month since December 2000.

Motherglass manufacturers were not prepared for the demand, which added to the shortage, Rhodes said. Some of the big players have not decided if they are going to build new factories, and it takes about two years for new manufacturing plants to be ready to produce, according to Rhodes.

PC makers, such as Dell Computer and Apple Computer, have been heavily promoting the space- and energy-saving aspects of flat-panel screens.

The closing of an NH Techno Glass plant, which supplies about 10 percent of the worldwide demand for motherglass, will also hurt supply. The company's customers include LCD producers Fujitsu, Samsung Electronics, International Display Technology, Chi Mei Optoeletronics and HannStar Display.

Companies to most likely feel the effects of the worldwide shortage include ViewSonic, Samsung, Sharp, Reptron Electronics, Jaco Electronics, Phillips, Corning, NEC-Mitsubishi Electronic Display, Toshiba, and Matsushita Electric, Rhodes said.