Compal Electronics president Ray Chen is expecting a possible panel shortage in the second quarter of 2010 just as demand for notebooks and LCD TVs starts to pick up.

He said that the panel industry outlook is better than previously expected as driver IC backend supplier International Semiconductor Technology has seen orders from panel makers recover for November and December. It is looking like the panel industry has recovered quickly, with fourth-quarter 2009 likely to be stronger than expected, he said.

However this has caught many panel makers on the hop and could mean that there are shortages just as the market starts to pick up. It is not clear what action the panel makers are taking but it could mean that there are less panels in the marketplace than are needed during the start of 2010.