Wednesday, 24 May, 2006
Samsung expects 10% drop in LCD prices
Samsung expects prices of LCD panels to fall by around 10% in the second quarter from the previous quarter.
Samsung had already made the price cuts during April and May.
The comment comes as analysts expect many LCD makers to post operating losses in the second quarter due to weaker-than-expected panel prices and increased competition.
Samsung had expected last month LCD panel prices to stabilise during the second quarter.
“Given the sharper-than-expected panel price fall so far, top-tier firms such as Samsung and LG.Philips LCD are also expected to swing to losses,” said Lee Min-hee, an analyst at CJ Investment Securities.
Lee forecast the industry’s average LCD panel prices to fall 14% in the second quarter from the first quarter, accelerating from a 3% fall between January and March.
Samsung said earlier this month a volume and price recovery in LCD panels would accelerate in the second half, with “marked improvements” in margins.
Its LCD division posted a 4% profit in the first quarter, down from 13% in the fourth quarter.
Price competition that has cut LCD makers’ margins is set to intensify with AU announcing the acquisition of its local rival Quanta Display.
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