Chi Mei Optronics has turned on, tuned in and dropped out. The company, Taiwan’s second biggest LCD maker, is halting construction of its latest factory, acknowledging the industry’s rapidly fading dynamics. Average panel selling prices are falling, by an expected 10 per cent this quarter, but this has failed to spark demand – indeed, lower prices can have the opposite effect as consumers hold out for cheaper TVs. Panel makers had expected to ship around 15m panels this year; but they managed barely a fifth of that at the halfway stage. Inventories are building up.

To date, this has caused scant consternation, as capital expenditure plans by LG Philips, Samsung and its peers show. The LCD industry – like many Asian businesses – is fixated on size. Manufacturers can shrug off the plummeting price-tags on 17” screens because they are looking to the future, when – they believe - TV screens will take market share from computer monitors. That creates demand for bigger screens, but also brings the LCD makers into a market now ruled by the plasma display panel makers. By the time 32” screens are rolling off the next generation LCD plants, PDP makers will very likely have stolen a new lead – either in quality or gimmick.