On September 10, 2008, LG Display announced that it will most likely not meet its initial guidance for the third quarter of 2008 (Q3’08). The main reason given is the sluggish global economic environment and the more-than-expected declines in LCD panel prices. In terms of area shipments, LG Display is expecting an increase in the mid-teens in Q3’08, down from its initial guidance of growth in the low-twenties. ASP/m2 of glass is expected to decline in the high-teens, much more than the initial expectation of a low-teen drop. Unchanged is the company’s efforts to reduce the cost of goods sold (COGS); the company is expecting a mid- to high-single digit percentage drop in Q3’08.
According to James Jeong, CFO of LG Display, the company has been “adjusting the input volume of glass substrates since the end of July” and being able to maintain healthy levels of inventory. Jeong also expects EBITDA to be in the mid-twenties in Q3’08. This news does not bode well for LCD glass suppliers such as Asahi, Corning, NEG and NHT. If LG Display has been throttling down glass input from late July, I’m sure others have as well. The only exception could be Samsung‘s LCD division as its S-LCD supplies to both Samsung and Sony, which are the strongest brands for LCD TVs. In general, when there are many uncertainties (as is the case right now), consumers tend to shift toward purchasing well-known brands. And when it comes to TVs, there are no stronger brands than Samsung and Sony at the moment.
Source: LG Display
[tags]LG Display, LCD Manufacturer, Display Manufacturer, LCD Glass, Glass Substrate, Corning, Asahi, NEG, NHT, LPL[/tags]