Wave Issue 0209 3/15/02 Article 6-01

***DisplaySearch Report Indicates Q4'01 Notebook PC Shipments
Established Record High
(March 12)

DisplaySearch, the worldwide leader in FPD market research and
consulting, revealed in its latest Quarterly Notebook PC Shipment
and Forecast Report that Q4'01 notebook PC shipments rose 11%
year-over-year (Y/Y) to a new record high of 6.9 million units,
nearly 500K units higher than the previous high established in
Q3'00.

For all of 2001, volumes rose 5.6%, significantly below the 2000
growth rate of 27.2%. Advance sales of LCDs and associated
production lead-times provide a reliable guide to identify
notebook computer shipment volumes for the next 2 - 3 months and,
accordingly, DisplaySearch is optimistic that Q1'02 will result
in notebook shipments in excess of 7 million units for the first
time.

On a revenue basis in Q4'01, notebook display revenues were up
20% sequentially and down 32% Y/Y to $1.38 billion. Sequential
revenues were up, despite the fact that Q4'01 ASPs fell again
from $195 per panel in Q3'01 to $192 per panel in Q4'01. The
peak ASP occurred in Q1'00 at $463 and Q4'01 is believed to be
the trough, with ASPs expected to rise 12.5%% in Q1'02 from $192
to $216.

In forecasting future pricing, the DisplaySearch report warns
about currency exchange rates. With the U.S. dollar (US$) at
relative strength against Asian currencies, US$-based pricing
projections are risky, particularly since the Crystal Cycle
appears to correlate to exchange rates. In other words,
historically, LCD supply shortages coincide with a weakened US$,
thereby accentuating pressures to higher prices.

The price/performance gap between notebook PCs and desktops is
narrowing due to continuous improvements in both reduced notebook
PC component pricing and improved performance. This trend is
evidenced by the continuous march to ever-larger displays in
notebook computers, suggesting that buyers are using notebooks to
replace their desktop computers, rather than to serve as a second
computer for travel. By size, shipments of 15.0" panels
significantly outpaced expectations, growing by 70% sequentially
and 211% on an annualized basis. The 14.1" and larger panel
share has risen from 45.7% in Q1'00 to 81.0% in Q4'01, and 15.0"
and larger panels are expected to capture 35% of the total
notebook PC market by Q4'03.

By resolution, SVGA (800 × 600) and XGA (1,024 × 768) notebook
shipments lost ground to higher resolutions in Q4'01 as SXGA+
(1,400 × 1,050) and UXGA (1,600 × 1,200) grabbed 14.3% of the
total market, up from 6.5% in Q2'01. Still, XGA represents the
dominant pixel format at 81.7% of the total market.

The DisplaySearch report not only details historical and
forecasted shipments of notebook PCs by panel size, resolution
and pricing, but, beginning with this issue, the report provides
details about the LCD value chain from TFT LCD maker to notebook
brands. For example, the largest buyer of LCDs for notebook PCs
in Q4'01 was not one of the major Taiwan notebook OEM
manufacturers, but Dell Computer, which purchases a large portion
of its TFT LCDs directly for BTO integration at a Dell
manufacturing facility. Dell, Quanta Computer and Toshiba
accounted for 32% of all TFT LCD procurement for notebook PCs.

DisplaySearch also identifies notebook PC brand trends by panel
size. For example, when considering average panel size, HP, NEC
and Gateway lead the industry at 14.26", 14.21" and 14.19",
respectively, while Apple, Sony and Sharp ship notebook PCs with
the smallest average diagonal measurements at 13.42, 13.81", and
13.84", respectively.
The report also includes an extensive review of how each TFT LCD
manufacturer's products fit into the notebook PC market as a
whole. Although Samsung, LG.Philips and Hitachi continue to
dominate the market volume-wise, this report newly indicates
strong leadership positions also being taken by Sharp, IDTech and
others when considering other performance parameters.

DisplaySearch will be hosting its 4th annual US FPD Conference in
San Diego from March 20-22.

www.displaysearch.com