Falling prices

Reflecting weaker demand, LCD panel prices began sliding in June and analysts say inventory is building up.

“Key clients such as Dell and Acer stopped making new orders in June,” said Lee Min-hee, an analyst at Dongbu Securities. “Price falls will be even deeper in July.”

Further weighing on the sector’s outlook, some nine new production lines from leading LCD makers in South Korea, Taiwan and Japan are scheduled to start operating next year.

“The industry downturn should continue over the next year,” Lehman’s Kim said.

Research firm iSuppli expects the market for large-sized LCD panels, used in TVs, monitors and notebook computers, to grow 19.9 percent this year to US$88.9 billion, but the forecast is far slower than a 37.5 percent increase in 2007.

Meanwhile, LG Display is expected to more than double its net profit in 2008 to 2.94 trillion won, Reuters Estimates showed.

While the figures are still positive, they could very well be revised down as concerns grow over the second-half performance.

Shares in LG Display, worth about US$13 billion in market value, fell 11.8 percent in the second quarter against a 1.7 percent loss in the broader market as the industry’s outlook dims.

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