Strong demand for flat screen televisions and a shortage of PC display panels has ensured that the LCD industry has enjoyed strong earnings for the first part of 2008. This imbalance between supply and demand has enabled the top three vendors in the region to charge more for their products – prompting treble profits for the second quarter.
However although market leader LG Display is set to double its year-on-year net profit, growth figures may well be revised as concerns grow over performance in the second half of the year.
Shares in LG display fell by 11.8 per cent in Q2 as the LCD market shrank by 1.7 percent. Demand from the US and Europe has slowed due to the weakening economies in these regions and China, which was tipped as a major consumer of LCD’s in the run up to the Beijing Olympics has had sales hurt by disasters like the may earthquake said Reuters.
As demand weakens, prices are set to slide. A spokesman for Korean financial service company Dongbu Securities said: “Key clients such as Dell and Acer stopped making new orders in June. Price falls will be even deeper in July”.
It has been reported that LG may halt production of LCD screens in an effort to stabilise falling retail prices.
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