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Friday, October 13, 2006

LG.Philips LCD to spend half as much as AUO and CMO in 2007

By William Trent, CFA of Stock Market Beat

When we reported on LG.Philips earnings results, we noted that it was positive that they were cutting planned capacity expenditures. However, we expressed concern over whether competitors would follow suit.

According to DigiTimes:
Although both AUO and CMO have trimmed their 2007 capex amounts following slow industry performance, the amounts are still significantly higher than the 2007 capex planned by LG.Philips LCD.

AUO will allocate only 60-70% of its originally planned NT$100 billion budget for 2007, compared to around NT$95 billion (around US$2.85 billion) it will spend this year, according to HB Chen, president, COO and spokesperson of AUO, in July.

CMO has trimmed its capex for 2007 to NT$70-80 billion, company CFO Eddie Chen said in August, amid delay of a second-stage expansion at its 7.5-generation (7.5G) plant until 2008.
Looks like everybody is ready for the glut to end.

The author may hold a position in the securities discussed. A current list of the author's holdings is available here.

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