By Rhee So-eui
SEOUL (Reuters) – Flat screen maker LG.Philips LCD Co. Ltd. (034220.KS: Quote, Profile, Research expects prices of its television panels to fall at a much slower pace this year on stronger demand and limited output growth, a company executive said on Thursday.
After makers raced to ramp up production, the liquid crystal display (LCD) industry has suffered tumbling prices and oversupply since last year, but finally expects a cyclical upturn in the second half as low price tags encourage consumers to buy large, sleek TVs.
“TV panel prices in March-April were likely the lowest throughout the year,” Champ Shin, vice president in charge of TV panel sales, said at the Reuters Global Technology, Media and Telecoms Summit.
He expected the decline for entire 2007 to be about 15 percent at worst, sharply slower than over 30 percent last year. A reduction in inventory since late last year and an expected seasonal demand growth in the second half, combined with a limited growth in fresh supply will help, he said.
“The prices will likely be stable for the time being. In the strong season, there’s even some chance for a (price) rise,” said Shin, who added August to October typically marks a peak in the business.
LG.Philips, the world’s No. 2 maker of large-sized LCD panels, competing with bigger home rival Samsung Electronics Co. Ltd. (005930.KS: Quote, Profile, Research and Taiwan’s AU Optronics Corp. (2409.TW: Quote, Profile, Research, reported its fourth consecutive quarterly loss in the January-March quarter but expects to turn around to a profit during the current quarter.
“We are confident of a monthly break-even in the second quarter,” Shin said, declining to elaborate on the timing. He expected the company to see gradual profit growth from then on.
Analysts polled by Reuters Estimates expect LG.Philips to earn 298.5 billion won ($321.6 million) in net profit this year, swinging from a 769.3 billion won loss in 2006. Lifted by a hope for earnings recovery, the company’s shares rose 38 percent so far this year, outperforming the wider market’s (.KS11: Quote, Profile, Research 12.6 percent gain.