February 3, 1999 Web posted at: 5:48 p.m. EST (2248 GMT) by Rob Guth

From...

(IDG) -- Over the next six months, the world's top makers of thin-film transistor (TFT) LCDs will raise prices -- in some cases nearly 30 percent higher than their current levels -- in an effort to bring their screen businesses back into the black, spokesmen at the companies said.

Users, however, are unlikely to see any major price increases in end products, such as notebook PCs and flat-panel displays, analysts said. Downward price-pressure on systems will prevent PC makers from passing the higher costs along to customers, said Akira Minamikawa, senior IT analyst at International Data Corp. in Japan.

Sharp, the leading maker of the screens used in notebook PCs, has already asked overseas PC makers to accept a 15 percent price rise, and in future will likely boost prices to between 20 and 30 percent over their current level, according to Hitoshi Wakita, a spokesman at the company's Tokyo office.

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Toshiba has lifted its prices by 15 percent and will raise its prices more in future, according to company spokesman Keisuke Ohmori at Toshiba's headquarters in Tokyo. NEC has already increased it prices by 10 percent and will boost prices in the future, according to an NEC spokesman.

"Basically we're asking our customers ... for reasonable price rises," said Toshiba's Ohmori. "We need profit, so we asked for it."

PC makers will likely accept the price hikes, analysts said. Over the years, volume buyers of screens and their suppliers have established relationships that offer some buffer when times are tough for either side. PC vendors require screens when they are in short supply and in many cases are willing to shoulder price increases to assure a steady supply, the analysts said.

The bulk of the TFT LCDs affected by the increases are 12.1- and 13.3-inch and some larger size units, the spokesmen said. NEC stopped manufacturing the low-margin 12.1-inch screens and will spread increases over its full TFT LCD lineup, which includes 13.3-, 14.1-, 15-, 15.4-, 18.1-, and 20.1-inch models, the NEC spokesman said.

Current prices are in the region of around $260 for a 12.1-inch Super VGA TFT screen, company spokesmen said.

The moves come amid strong demand for screens from both notebook vendors and customers building flat-panel monitors for desktop computers -- but amid tight production.

The top makers of the screens are in Japan and South Korea. Samsung Electronics, the largest Korean TFT LCD supplier, predicted as early as October 1998 that prices would start inching up this year.

The protracted economic troubles in both countries are squeezing vendors' capital equipment investment, and screen production is falling short of demand, the company spokesmen and analysts in Japan said. In addition, the recent rise of the yen lessens the value in yen terms of the dollars earned from screens sold abroad, the spokesman said.

"[PC] manufacturers want screens, but production isn't going up," Sharp's Wakita said.

Rob Guth is senior Asian correspondent for the IDG News Service in Tokyo. Taipei, Taiwan correspondent Terho Uimonen contributed to this report.