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Friday, September 01, 2006

LCD Market Update

By William Trent, CFA of Stock Market Beat

Last quarter, global LCD TV shipments reached 9.4 million units, up 28% sequentially from 7.4 million units in the first quarter, and 135% year-on-year according to DisplaySearch. The LCD TV penetration rate in the global market gained five percentage points and amounted to 22%.

Driven by large-size TV sales, LCD TV revenues grew 29% on quarter to US$11.3 billion.

LG Electronics and Sharp Corp. said on Thursday they expected prices of flat LCD television sets to drop by 20-30 percent or more in 2007 amid overproduction and cost reductions.

“Last year we saw about 30 percent of price reductions for plasma and a little bit more for LCD. Next year, in 2007, we expect about the same,” Young Chan Kim, head of global marketing for LG’s displays division told journalists at the IFA consumer electronics show.

We only wrote about this, like, 500 times. But it’s cool that the industry folk have gotten past the denial stage and are just dealing with it. That probably means, under normal conditions, that the worst is over.
Still, we worry about Corning’s CEO selling shares when they are at a 52-week low. We have never disputed that there is strong underlying demand for LCD and plasma televisions. Rather, we are concerned that the supply is rising at even faster rates.

We think we’ll wait to see what happens to high-end consumer spending for the holiday season before turning bullish.

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