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Plasma Display Shortage To Shrink Price Gap With LCD TVs

Posted by iTech - 2005-11-10

The surplus of plasma display panels in the first half of 2005 has turned into a shortage, which stands to slow price decreases and shrink the price gap between LCD and plasma televisions, according to a new report from DisplaySearch.

The Austin, Texas-based research firm said plasma display panel shipments hit 1.9 million units in the thrid quarter, up 118 percent year over year. At the same time, four older fab lines were terminated recently, causing a drop in production as demand increases. That could lead to double-digit shortages in the fourth quarter, according to DisplaySearch.

Because of the supply slowdown, prices plasma TVs won't drop as fast as they have. Currently, there are no supply concerns for LCD panels, so the price difference between plasma TVs and LCD TVs should narrow, spurring demand for LCD TVs next year, DisplaySearch said. The research firm also expects plasma display panel makers to speed up investment in manufacturing facilities next year.

Michael Conti, owner of Imagestics, a Friendswood, Texas-based digital integrator that sells and installs plasma and LCD TVs, said he's not surprised to hear about the plasma display panel shortage. A lot of the shortfall side seems to be caused by large retailers, he said.

"I recently waited one-and-a-half months for an LG [Electronics] plasma display panel, and they eventually swiped one from a shipment headed for a local Best Buy store," Conti said.

In the third quarter, 42-inch extended definition plasma display modules accounted for 52 percent of the plasma market, down from 55 percent the prior quarter, DisplaySearch said. Meanwhile, high-definition 42-inch models accounted for 27 percent of the market, up from 24 percent, as the price gap between the two technologies decreased to $140 from $154 during the quarter.

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