Shipments plateaued in the second quarter of 2003 owing to the impact of SARS (Severe Acute Respiratory Syndrome) on TN/MSTN (Twist Nematic / Monochrome SuperTwist Nematic) LCD (Liquid Crystal Display) factories, as well as piled-up inventories in China and new model transitions. However, the second half of 2003 saw growth from mobile phones, digital cameras, portable VCD/DVD players, as well as an explosive increase in automotive display shipments. Taiwanese small and medium display panel volume thus increased 79.7% in the second half of 2003 from the first half.

ASP (Average Selling Price) for the Taiwanese small and medium panel industry was US$5.4 in 2003. Panel used for digital still and digital video cameras gradually shifted from CSTN to TFT (Thin-Film Transistor), which saw heavy volume in the second quarter of 2003. In the second half the comparatively larger panels used for portable VCD/DVD players and automotive displays also saw higher shipment volume. In addition, the share higher-priced color panel grew from 37% in the first quarter to 67% in the fourth quarter, adding a further boost to shipment value.

A supply shortage affecting CSTN and AMLCD (Active Matrix Liquid Crystal Display) that began in the fourth quarter of 2003 has already extended lead times from between four and six weeks to between eight and twelve weeks. However, demand for mobile phones, automotive displays, portable VCD/DVD players, and multimedia devices remains strong, and customer orders are evident beyond six months. Additionally, panel makers are seeing increasing efficiency in capacity utilization. Coming out of the seasonal slowdown in the second quarter of 2004, and with new models rolled out in the end market, Taiwanese small and medium panel shipment volume is expected to grow 28% year on year reach 187 million units in the first half of 2004, a slight 2% decline from the second half of 2003.