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LCD panel makers increase spending to meet consumer demand for LCD panels

LCD panel makers are expecting a banner year in 2008 thanks to the fast-approaching switch from analog broadcasts to digital broadcasts due in February, 2009. LCD makers are expecting a record year with shortages in the LCD market keeping demand for panels up.

The LCD panel market looks so good for 2008 that the Wall Street Journal reports many of the LCD industries biggest panel makers are greatly increasing their capital spending in 2008 to increase production capacity for LCD panels.

Samsung announced it intends to increase its capital spending to  3.7 trillion won or $3.9 billion USD. This figure represents double the capital spending from Samsung last year. Sharp also plans to increase its capital spending with 197 billion yen, or about $1.85 billion USD earmarked.

The market projections from several research companies are predicting strong growth in the LCD market in 2008. iSuppli is forecasting revenue of $82.1 billion USD this year, a 14% increase, for the LCD industry.

The downside to the increased capital spending in 2008 will be felt in 2009 when the increased production capacity makes for an oversupply in the market. This excess of LCD panels is expected to hurt the LCD makers in 2009 by driving prices down. Market-research firm WitsView general manager Henry Wang told the Wall Street Journal, “Currently, I'm expecting an oversupply in 2009, but it could come earlier.” Some analysts are saying the oversupply could come as early as Q4 2008.

LCD panel makers have been scrambling over the last year to build alliances with competitors to allow for lower production costs and to meet consumer demand for LCD panels. 

DailyTech reported in December of 2007 that Toshiba and Sharp had formed an alliance for LCD panels. Later the same month DailyTech reported on details for multi-billion dollar talks between Hitachi, Matsushita and Canon for LCD panels.

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By Iketh on 1/22/2008 4:07:48 PM , Rating: 4

RE: yay
By jbzx86 on 1/22/2008 5:11:56 PM , Rating: 4
The sooner the oversupply comes the better for us all.

RE: yay
By InternetGeek on 1/22/2008 5:30:35 PM , Rating: 2
Yeah, let the price/features war begin.

RE: yay
By logaldinho on 1/22/2008 6:56:02 PM , Rating: 2
what are they talking about 2009 is the year of the OLED, that should keep the profit margins up for these companies.

RE: yay
By omnicronx on 1/23/2008 8:46:00 AM , Rating: 5
No.. they are not.. They are talking about LCD's in general because of the FCC shutdown mandate of all analogue TV stations. OLED is a ways off of being mainstream, especially if LCD prices continue to fall as the article states. Currently only small screen OLED's have been produced, and i would not expect 42inch plus models to become mainstream for 5 or 6 years. But if you are looking at a huge 20 incher, then sure wait for OLED in 2009 ;).

RE: yay
By PandaBear on 1/22/2008 8:54:19 PM , Rating: 2
2009 will also be the year when US shut down the analog broadcast, so I am not sure if this is going to be really "oversupply".

Anyhow, I am planning to move my 32" LCD to my bedroom and get a 47" LCD for less than 1K. If this oversupply comes I am all happy.

"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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