Barclays Capital lowered its rating from “overweight” to “equalweight” on Nippon Electric Glass (NEG) due to the overall slowing down of demand in the LCD industry. Eric Lee, analyst at Barclays, wrote in a reported dated August 14th that demand for LCD TVs are moderating. Lee kept the overweight rating for NEG since January 25th and was compelled to lower the company’s rating due to excess LCD TV panel inventories in the second quarter, weak July LCD panel sales and an expected even weaker August.
Corning is the dominant supplier of LCD glass and enjoys roughly 55% market share in terms of area shipped. Corning’s market share includes its joint venture with Samsung called Samsung Corning Precision (SCP). AGC is number two but with significantly less share in the mid-twenties. NEG is number three right behind AGC capturing the rest.
According to DisplaySearch’s Tadashi Uno LCD glass suppliers have minimized investments toward new tanks and instead are focused on increasing capacity of existing tanks. Uno “doesn’t foresee any significant price reductions in the near future” as of May 12th. That was about a quarter ago and the market has changed quite a bit. I expect growing pressure to reduce prices for LCD components including LCD glass as the entire industry moves ahead toward the fourth quarter with caution. Source: Bloomberg, DisplaySearch