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The market for liquid crystal display flat panel display screens will rebound sooner than had been expected due to proactive changes in the industry, according to market analyst DisplaySearch.

Changes in the market for large LCDs, defined as screens 10 inches and bigger and commonly used in flat-panel monitors and notebook computers, has led the Austin, Texas, research company to revise its market analysis released in March, DisplaySearch said in a statement Wednesday.

The company expects the market for large LCD FPDs to beat the March forecast by 7 percent, growing a total of 55 percent in 2002 to 70.2 million units shipped, DisplaySearch said. Growth is being driven by an investment increase, which in part is allowing a number of major manufacturers to launch fifth-generation factories this year, DisplaySearch said.

Manufacturers have been able to stretch capacity by focusing on producing a single product, which reduces the downtime needed to switch factories over to making secondary products, according to DisplaySearch. Additionally, they are reducing downtime for maintenance, upgrading factory equipment, simplifying some of the production processes and buying equipment that will help avoid bottlenecks, DisplaySearch said.

Prices Will Rise, Too

DisplaySearch expects to see an increase in the price of thin film transistor LCD panels throughout the year, projecting a growth of 79 percent in large-area TFT LCD revenue to $20.3 billion in 2002, the company said.

The large-area TFT LCD market will drive the industry as a whole, with the TFT LCD market expected to rise 69 percent to $24 billion in revenue and the total FPD market to rise 47 percent to $32.3 billion, DisplaySearch said. That is 7 percent or $2.2 billion higher revenue than DisplaySearch's March forecast, the company said.

At the beginning of the year, some industry vendors were warning of an impending LCD shortage, which would in turn have created sudden price increases. Coupled with increased demand for buying LCDs, a less-than-adequate supply of the "motherglass" used to produce LCD screens was also expected to have negative effects on the market.

Among the manufacturing improvements this year, TFT LCD suppliers have been accelerating glass input, DisplaySearch said.