El Segundo (CA) - LCD panels are rebounding, which not only means tighter margins for monitor makers but also sets the stage for the transition to larger desktop and notebook LCDs for the mass market.

According to a report released by iSuppli, the current price increases are coming after five months of oversupply and sharp price declines with 17" panels dropping by 19% and 19" panels by 18% in the fourth quarter of last year alone. Factors contributing to the changing environment are declines in supply (reduced panel inventories, less fab utilization) while Windows Vista has triggered an increase in demand for LCDs.

While panel prices are gaining momentum, it is unlikely that consumers will see higher prices for their 17" or 19" displays on the desktop or for 15" notebooks. Instead, manufacturers are shifting their capacity to larger-sized and widescreen panels, which promise higher margins and more profitability. iSuppli said that some suppliers even stopped production of certain panel sizes that were yielding losses or weak profits.

This trend implies that 20", 22" and 24" LCDs could become a common sight for mainstream desktop in the very near future.