Global capacity is forecasted to grow 51% between 2004 and 2005. 6G lines will be the chief contributor of the capacity expansion, yet compared to the gains in supply, worldwide demand for applications such as LCD monitor, notebook PC, and LCD TV are expected to only grow by roughly 30%, 30%, and 60%, respectively. With higher capacity and yield rates on 6G lines in the second half of 2005, oversupply of large size panels will likely surface.

Taiwanese small and medium display panels, despite being plagued by sustained key component supply shortages, have witnessed successive quarterly gains. Shipment volume reached a new high of approximately 109.2 million units in the first quarter of 2004, 12.4% sequential growth but a dramatic 50% increase year on year. Lower-priced TN/MSTN panel accounted for over 50% of volume, while these panels contributed 25% of shipment value.

Mobile phone applications comprised the heaviest share of Taiwanese small and medium panel volume, at approximately 42%. Taiwanese panel makers already supply up to 30% of the main screens used in mobile phones, 80% of which are produced by Taiwan's five largest STN LCD suppliers. As Japanese panel suppliers withdraw from MSTN and CSTN production, relationships between Taiwanese makers and international mobile phone vendors are expected to become yet closer. However, finding ways increase the share of higher-priced, higher-profit TFT and LTPS panels and competing with the leading technology of Japanese makers will be the next major issue for Taiwanese small and medium panel suppliers.