Australians looking to buy a cheap 37″ LCD TV could face problems from inferior panels.

It has been reported that TFT LCD panel agents in Taiwan and China are dumping 37-inch LCD TV panels including panels from Sharp for as low as $700 due to oversupply in the 37-inch segment, according to Chinese-language newspaper the Commercial Times.

Executives at Taiwan-based home appliance makers Kolin and Sampo confirmed thay they have seen the low prices being offered but pointed out that these low priced panels have pixel defects. The companies said that they would not buy these panels because of the potential of defects.

However, in a separate case, Taiwan-based panel makers has reached an agreement with an unspecific Taiwan-based home appliance maker to supply the company with 37-inch LCD TV panels priced lower than US$700 at the end of April or beginning of May, the paper cited sources as saying.

According to the latest panel pricing from DisplaySearch, the average selling price for 37-inch LCD TV panels has dropped to US$730 in April, down from US$770 in the second half of March. Earlier reports show that the research firm expects prices in the 37-inch segment to steadily drop through the second quarter with the street price of LCD TV’s dropping by as much as 15 to 20%.