DisplaySearch also predicts that larger-size LCD TVs, up to 65-inch models, will have even sharper drops in production costs at almost a 20% per year.

According to projections by DisplaySearch, production costs of LCD TVs will decrease 10-16% annually through 2010. Increased outsourcing of TV assembly, improved efficiency and lower material costs will contribute to the cost savings.

The research firm predicts that by the fourth quarter of 2010, 52-inch full HD TV production costs will be less than $1,000.

DisplaySearch also predicts that larger-size LCD TVs, up to 65-inch models, will have even sharper drops in production costs at almost a 20% per year.

The 32-inch segment however, according to DisplaySearch, will not see a major reduction in production costs in 2008 because limited 6G capacity.

This rapid decline in manufacturing costs will likely translate into an even more rapid retail price drop for flat panel TVs.