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LG Display, AU Rise as Quake Disrupts Corning Plant

Post Time:Aug 13,2009Classify:Company NewsView:373

LG Display Co. and AU Optronics Corp. led shares of liquid-crystal-display makers higher on speculation panel prices will extend gains after an earthquake shook Japan, disrupting production at glass maker Corning Inc.

LG Display, the world’s second-largest LCD producer, climbed 2 percent to a one-week high at 11:33 a.m. Seoul time, bucking the drop in South Korea’s benchmark Kospi index. AU and Chi Mei Optoelectronics Corp., Taiwan’s two biggest LCD makers, advanced in Taipei. Nippon Electric Glass Co., which competes against Corning, rose 4.5 percent, the most in almost a month.

Corning, the world’s largest maker of glass used in flat- panel televisions, said yesterday operations at its Shizuoka glass plant won’t resume “for some time” following the 6.5- magnitude quake. Analysts at Nomura Holdings Inc. and Good Morning Shinhan Securities Co. said the factory disruption will deepen a shortage of glass and lead to reduced LCD supply, which would help panel prices extend gains.

“The market is already in a glass shortage cycle and now with the factory disruption, the shortage may be extended,” said Roger Yu, a technology analyst at Polaris Securities Co. in Taipei. Production at Japanese panel makers may be reduced while Korean and Taiwanese makers may gain market share and benefit from rising panel prices, Yu said.

Glass Supply Cut

LCD prices may continue to rise next month because Corning’s factory disruption will probably cut global supply of glass, John Soh, a Seoul-based analyst at Good Morning Shinhan, wrote in a note today. Corning’s repairs may last at least two months, Nomura analyst James Kim wrote in a report today.

Sharp Corp., which counts on Corning for an estimated 70 percent of the glass needed for the company’s most advanced LCD factories, fell 3.1 percent, while Japan’s benchmark Nikkei 225 Stock Average dropped 0.8 percent.

Osaka-based Sharp, Japan’s biggest LCD maker, will have difficulty procuring glass because of its reliance on Corning and as the product is in shortage, Nomura’s Kim said. Yujiro Nishio, a Sharp spokesman, said he couldn’t immediately comment on the effects of Corning’s factory disruption because the Japanese company is investigating the matter.

Corning said yesterday third-quarter LCD glass volume at its wholly owned business will decline as much as 10 percent from the second quarter, compared with a previous forecast for no growth to a small increase.

Kelli Hopp-Michlosky, a spokeswoman at Corning, and Kenneth Sofio, an official at the glassmaker’s investor relations department, didn’t immediately respond to calls made after hours.

Yesterday’s earthquake struck near the coast of Japan southwest of Tokyo, injuring more than 100 people, damaging buildings and a four-lane expressway.
 

Source: bloomberg.comAuthor: shangyi

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