For PC users casting a covetous eye over a flat-panel to replace their bulky CRT monitor, now may be the right time to start thinking about an upgrade as the cost of these slimline screens is expected to fall in the coming months.

Flat-panel prices have soared more than 40 percent over the past year but analysts tracking the display market say prices will now start to come back down due to increases in production capacity.

The ASP (average selling price) for a flat-panel screen reached $270 (£177) during the second quarter of 2002. That represents a 42 percent increase over the same period last year when the ASP for large flat-panel displays hit a low of $189 (£124), according to AU Optronics, the world's third-largest flat-panel maker.

That reflects a trend across the entire flat-panel industry where the average price for 15in TFT LCD (thin film transistor liquid crystal display) modules — the actual display component of a flat-panel monitor — rose 29 percent between September 2001 and June 2002, according to market analyst DisplaySearch. At the same time, prices for 15in flat-panel monitors, the most popular monitor size, rose six percent, it said.

With production capacity on the increase, prices for TFT LCD modules are expected to fall and that will translate into lower costs for end users as vendors are likely to cut prices on 15in monitors, DisplaySearch said last month.

"We have much more capacity coming out this summer and in the second half of this year," said Sean Wu, a senior analyst at the Market Information Centre of the Institute for Information Industry, Taipei.

But even as increased capacity leads to lower prices, the cost of flat-panel monitors will rise again if demand for flat-panel displays exceeds supply. That could happen during the second half of 2003 or in 2004, when demand for LCD televisions will be stronger and major PC vendors, such as Dell, start to push LCD monitors more aggressively, reducing the percentage of PCs that ship with a CRT monitor, Wu said.