Although the third quarter is traditionally the peak sales season for LCD monitors, inventory pile-ups from the end of the second quarter and the swift fall in LCD panel prices resulted in a slowdown in maker shipments, as well as wait-and-see attitude in the consumer market, the largest market for CRT monitor replacement demand. Market demand did not rebound until the second half of the third quarter, yet still brought about a record high of 10.7 million units, albeit marking a slower year-on-year growth.

In response to the continuing boom in LCD monitor panel capacity, 15", 17", and 19" LCD panel prices dipped deeply in the third quarter of 2004, in turn bringing down LCD monitor prices. As a result, Taiwanese LCD monitor ASP (Average Selling Price) dropped slightly from the second quarter. Shipment value amounted to around US$3.3 billion, registering a year-on-year rise of about 20%.

The narrowing price gap between 17" and 15" LCD monitors gave a boost to 17" shipments in the third quarter of 2004. By contrast, the price gap between 19" and 17" LCD monitors discouraged demand for 19" monitors in the third quarter, resulting in sequentially weaker shipment volume growth for LCD monitors 19" and above.

In the CRT monitor segment, short glass supply in the second quarter saw relief in the third quarter. However, most Taiwanese makers have been switching focus towards LCD monitors and outsourcing CRT monitor production to Chinese and larger Taiwanese monitor makers. Taiwanese CRT monitor shipment volume thus only totaled 8.5 million units, posting a sequential decline of roughly 14.6% in the third quarter of 2004.

Shipment share of different screen CRT monitor sizes remained roughly unaltered from the second quarter. Nonetheless, the relieved shortage of tubes, which account for the bulk of CRT monitor cost, brought the third quarter ASP down to the same level as in the third quarter of 2003. Taiwanese CRT monitor shipment value amounted to around US$800 million.

Looking towards the fourth quarter of 2004, with the year-end peak season at work, inventory levels down to normal, and panel prices expected to drop further, Taiwanese LCD monitor shipment volume is anticipated to strike another record high and register significant growth.

Improvement in the tube shortage problem and demand from emerging markets should make room for CRT monitor growth in the fourth quarter. However, plunging LCD monitor prices are expected to enhance the replacement effect as well, bringing Taiwanese CRT monitor shipment volume to decline year-on-year, to near eight million units.