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Dell has dropped the prices for its 30- and 26-inch LCD TVs by as much as 10 per cent to US$1,799 and US$1,499, according to TMCnet. Although panel makers such as LG.Philips LCD and Chi Mei Optoelectronics (CMO) plan to increase prices for their 32-inch LCD TV panels amid strong demand, iSuppli pointed out that it is unlikely that panel makers will be able to maintain price increases in the long run.

As panel makers continue ramping up TV panel capacity in the second half of this year, panel prices are expected to start falling once again. In addition, with the LCD TV market growing, LCD TV vendors are increasing the volume of their panel purchases, which should provide them with more leverage when negotiating panel pricing, iSuppli said.

Global shipments of LCD TVs will total about eight million units in the first half of this year, iSuppli said. Since most panel makers have stated they expect LCD TV shipments to exceed 20 million units this year, they will have to continue lowering their TV panel prices to stimulate demand for at least 12 million TV panels in the second half of this year, the research firm said.

Furthermore, LCD TV panel prices will be also affected by the market condition of LCD monitor panels in the second half of this year, iSuppli said.

Currently, supply for 19-inch monitor panels has started running ahead of demand due to aggressive capacity ramping from makers in Taiwan and South Korea, iSuppli indicated. If makers look to shift capacity to LCD TV panel production, prices need to be low enough so that demand can absorb the additional capacity, the research firm warned.

Both AU Optronics (AUO) and Chunghwa Picture Tubes (CPT) expect prices for LCD TV panels to continue dropping, otherwise demand for the Christmas season might not be as strong as expected, the companies said.

While supply of LCD TV panels currently lags demand, CPT pointed out that this is mainly due to slower ramping of capacity at above sixth-generation (6G) plants caused by problems with steppers, and most of the tight supply is for 32-inch panels. However, the situation is only temporary, CPT added.