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South Korean LCD Cos Likely Outperformed Peers In 2Q

Post Time:Jul 15,2009Classify:Industry NewsView:455

TAKING THE PULSE: South Korean liquid crystal display makers Samsung Electronics Co. (005930.SE) and LG Display Co. (LPL) likely outperformed their rivals in Taiwan and Japan to swing back to profitability in the April-June period after steep losses in the first quarter as a global shortage of glass pushed panel prices up sharply.

But Taiwan's AU Optronics Corp. (AUO), Chi Mei Optoelectronics Co. (3009.TW) and Japan's Sharp Corp. (6753.TO) likely remained in the red during the three months ended June 30 as their factory utilization rates picked up slowly compared to their Korean rivals.

A persistent shortage of glass, a key component used to make flat-screen displays, strong demand for television panels from China, as well as seasonal demand and inventory restocking will likely continue to push LCD prices higher in the third quarter, analysts say. That should help AU Optronics, Chi Mei and Sharp return to profitability in the July-September quarter.

"As glass shortages might last at least through July, we expect price hikes to continue and vendors might push some orders into the fourth quarter," said Andrew Lu, an analyst at Citigroup. "But we forecast orders and the price hike momentum to slow once glass shortages ease, likely by the end of the third quarter."

Source: http://online.wsj.comAuthor: shangyi

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