A leading analyst has said demand for LCDs fell in December. The result? Cheaper sets in the first few months of 2007. Prices were low in January - and still are.

iSuppli says this ' price erosion' is expected to continue throughout the first quarter of 2007 because manufacturers thought there would be low demand through the latter winter months.

Large panel rices fell by 3 to 8 per cent during January, while notebook panels dropped by 2-4 per cent and LCD panels between 4 to 6 per cent.

iSuppli predicts that panel prices will continue to be split on price depending on product area. The analyst believed that monitor and notebook panel prices may stabilise by mid-2007.

Yet it expects television panels to continue to duck in price. This is also as a result to increased production from newer factories which have come online to cope with the explosion in demand for flat screens.

"It's a cause for concern that many panel suppliers reduced their fab [factory] utilisation rates to 80 to 85 percent in December through January," said iSuppli research expert Sweta Dash. [This is] "down from 95 percent and higher in November."

Dash said the move - intended to prepare manufacturers for the slow season - had not worked. "This failed to stop the steep fall in panel prices that we have seen in December and early in the first quarter."

Prices will begin to stabilise this month. A result, says Dash of Chinese New Year and other holidays cutting production.