The LCD monitor industry could be set for a bumpy ride in the year ahead with a forecast shortage of panels expected to cut deep into the second quarter of 2008.

According to a number of reports, makers have slowed down capacity expansion for fifth-generation (5G) and 6G plants as they set their sights on building capacity at 7G and 7.5G plants to meet demand in the booming LCD TV market.

Digitimes said yesterday that there had been a dip in production of 17-inch, 19-inch widescreen and 22-inch widescreen LCD monitor panels which looks set to persist in 2008.

And the growing popularity of notebooks over desktops among consumers hasn't been helping much either, with capacity for monitors being scaled back to make room for 5G lines to spit out enough panels for laptops.

Because of the spike in demand from other sectors, manufacturers have reportedly cut back capacity for 19 and 22-inch monitor panels that would usually be produced at 5G and 6G plants respectively.

An official at Taiwan's AU Optronics, the world's third largest LCD panel maker which supplies kit to the likes of HP and Dell, appeared to support the claim that demand was outstripping production.

"Supply is seen to grow by 22 to 25 per cent, but demand is seen growing by 28 to 30 per cent," the source told Reuters last week. ®