Samsung is expecting a 10% drop in LCD prices
Samsung Electronics expects prices of liquid crystal display (LCD) panels to fall about 10 percent in the second quarter from the previous quarter, a company source said on Tuesday.
Samsung, the world's second-biggest maker of large-size LCDs, had already made the price cuts during April and May, the executive told Reuters by telephone, declining to be named.
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 stabilize 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 percent in the second quarter from the first quarter, accelerating from a 3 percent fall between January and March.
The Samsung executive declined to give profit forecasts for the company's LCD business.
Samsung said earlier this month a volume and price recovery in LCD panels would accelerate in the second half, with "marked improvements" in margins.
In other news:
* Gates, Ballmer on challenges ahead
* Reporter's notebook: Art, engineering and a few bicycles
* A safe space for 'tweens' on the Net
* News.com Extra: Google to focus on London for next phase
* Video: Gates going, but slowly
Its LCD division posted a 4 percent profit in the first quarter, down from 13 percent in the fourth quarter.
Samsung competes with sector leader LG.Philips LCD of South Korea and Taiwan's AU Optronics. On top of its own LCD production lines, Samsung is also operating a joint flat-panel venture with Sony.
Price competition that has crushed LCD makers' margins is set to intensify with AU last month announcing the acquisition of its smaller local rival Quanta Display.
|