OCTOBER 2--DisplaySearch (Austin, TX; www.displaysearch.com), a leader in FPD market research and consulting, reported in its latest Quarterly TFT LCD Supply/Demand and Capital Spending Report that, because of lower than anticipated notebook PC demand and continued capacity investments, TFT LCD prices are not expected to rise until Q4'02, assuming current exchange rates. Despite falling 50% to 60% in 2001 depending on the panel size, large-area TFT LCD prices are expected to remain flat through most of 2002, as significant capacity continues to come on-line due to excessive spending in 2000 and 2001. As a result, the 2002 profitability outlook for TFT LCD manufacturers is weakened while the unit outlook for price-sensitive markets such as LCD monitors and LCD TVs is improved.

Said DisplaySearch president Ross Young, "Equipment spending in 2000 and 2001 was excessive, exceeding 30% of revenues. As a result, the magnitude and the duration of price increases in the next stage of the crystal cycle are expected to be shortened. TFT LCD capacity will rise by more than 75% on a square meter basis from Q2'01 to Q2'03, which will continue to put pressure on prices. With significant capacity already slated to come online and prices not expected to rebound until late 2002, a number of panel manufacturers are delaying 2002 spending plans. As a result, after declining 22% in 2001 to $5.0 billion, TFT LCD-related equipment spending is expected to fall an additional 3% in 2002 to $4.9 billion. In 2003, equipment spending is expected to rise by 22%, triggered by mild price increases and a tightening of supply in late 2002 and early 2003."

Tue Oct 02 08:47:00 CDT 2001