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December 9, 2008 10:23 pm

Sales of flat-screen PC monitors set to shrink

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Global sales of flat-screen computer monitors are almost certain to fall next year for the first time since they were invented, according to analysts and industry leaders, in a sign of how hard the economic downturn is hitting consumer sentiment in the US and Europe.

Industry leaders say the likely contraction next year is unprecedented.

Although flat-screen makers have endured tough times before, particularly when the tech bubble burst in 2001, volumes still rose.

This downturn will be “unique,” according to KY Lee, chairman of AU Optronics of Taiwan, the third-biggest producer after South Korea’s Samsung Electronics and LG Electronics.

Frank Wang, analyst at Morgan Stanley, said the industry faced “the worst ever market situation”.

Companies and consumers began replacing bulky cathode ray tube monitors with flat-panel liquid crystal display screens after their invention in the mid-1990s.

That spawned a global industry of companies producing tens of millions of flat screens a year, from 65in televisions to one-and-a-half-inch screens for mobile phones.

But next year worldwide sales of flat-screen PC monitors are likely to shrink about 3 per cent to 160.6m, according to WitsView, a Taipei-based research consultancy.

In an interview with the Financial Times, Mr Lee said: “When we entered this industry 12 years ago it was booming.

“It was growing so fast the only problem was caused by supply-side issues,” he said, referring to the over-expansion of capacity, which drove down prices.

“But this time, the issue has happened on the demand side, caused by the financial crisis globally.”

Henry Wang, general manager of WitsView, said that, in addition to the collapse of consumer sentiment, many people had in any case already replaced their cathode ray tube monitors with flat screens.

“This time around, the penetration rate is already very high so you cannot count on demand to pick up again,” he said.

However, Mr Lee said that future demand for flat screens could be spurred as manufacturers moved to offer a wider range of applications.

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