Demand for 32-inch plasma display panel (PDP) modules has been slow in the first quarter, but the market for the segment can expect overall growth in 2008 to account for 20% of total PDP shipments for the year, according to industry sources.

Thanks to a shortage of 32-inch LCD panels, PDPs have had surprising success in China and other markets with LG Electronics (LGE) launching 32-inch PDP TVs late in 2007. And the market potential of the 32-inch PDP segment has attracted other makers, such as Samsung SDI.

But 32-inch PDPs have seen a temporary setback in the first quarter, with shipments dropping about 3% in January, because of relatively sufficient supply of LCD panels of the same class, the sources said.

The sources said supply of 40-inch-and-below LCD TV panels will run short come this year's peak season amid sustained strong demand for 32-inch LCD TVs. Therefore, although prices for the 40-inch-and-above TV panels are declining in the first quarter, prices for 40-inch-and-below ones remain stable as clients continue to actively stock inventory for the segment, the sources added.

Because of adjustments to product mix to meet market demand and to improve profitability, some LCD panel makers have increased their output for the 40-inch-and-below segment, while others have maintained similar levels of output for the segment, compared to the previous quarter, the sources revealed.

The ease in 32-inch LCD panel shortage, therefore, has undermined demand for 32-inch PDPs, the sources commented.

But as there will be limited increases in LCD panel capacity in 2008, makers are likely to give priority to notebook and monitor applications to maximize their profits from the 40-inch-and-below segment. Therefore, shortages of 32-inch LCD panels should persist to the benefit of the 32-inch PDP segment, the sources said