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Tue 18 May 2004 04:00 AM

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Monitor prices going up

While CRT display prices have already risen due to raw material shortages, prices for TFT-LCD monitors may rise too as the industry experiences yet another glass panel shortage.

The monitor industry is bracing itself for yet more glass panel shortages this summer, a top figure at Samsung claimed this week. K.S. Vasudevan, senior manager at Samsung’s Digital Information Technology Division, forecast that the industry will not be able to meet demand for TFT-LCD monitors during the second and third quarters of this year.

“Industry sources predict that LCD-TV demand could grow in Q2 and Q3 of 2004,” says Vasudevan. “If that really takes shape, then the panel availability for LCD televisions takes preference over TFT-LCD monitors. That would keep the prices either stable or we could see an increase in prices for flat screen products. However Samsung has kept its commitment of regular supply in the past and will do in the future as well.”

This is the latest shortage in the flat panel display segment, after the industry experienced problems during 2003 and early 2004, adding to what is already a major concern for the channel – the current shortage in CRT monitors. The Middle East market has been experiencing problems meeting the needs of customers wanting CRT displays. Intriguingly the reason for this shortage is not so much vendors switching production from CRTs to TFT-LCD screens, but more a lack of raw materials needed in the production process.

“CRT shortages will continue for several months, because there is not enough glass,” explains Vasudevan. “Vendors switching to LCD manufacturing have added to the problem, but that is only part of the story. Japanese manufacturers have been phasing CRTs out for the past three years. While some manufacturers have been stopping production, others such as Samsung were in a position to supply. What concerns us is the availability of raw material at this point of time, the glass needed. This is creating the shortage and has resulted in price increases for CRT monitors, which is almost unheard of in the industry. But the channel will have to come to terms with the price rises. After the third quarter of 2004 the situation may change.”

Other market leaders have confirmed that there is a shortage of CRT monitors, but there is dispute over causes. LG believes that the problem is not with raw materials but rather due to unforeseen demand.

“There is a lack of CRTs due to the high demand for the product,” says Khaled Khuwailed, business development manager at PC International, LG’s distributor in the UAE. “Flat panel shortages have led to this situation. Maybe there is a problem with the glass but I am sure that LCD problems have had a direct effect on the CRT market, driving up orders.”

Samsung itself is planning to release a range of new CRT monitors this summer, packed with the latest features and designs to appeal to the regional market. The Korean giant must be hoping that shortages of glass for both CRT and TFT-LCD screens are short lived in order to meet increasing demand for its range of display products in what Samsung expects to be a bumper year for monitor sales.

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