Price pressure leads to loss at LG.Philips LCD

Price pressure leads to loss at LG.Philips LCD

The continuing fall of liquid crystal display (LCD) panel prices has led to losses at LG.Philips LCD, according Koninklijke Philips Electronics.

LG.Philips LCD, one of the world's largest makers of LCD panels that are used in flat-panel PC monitors and notebook screens, had a fourth-quarter net loss of $US32.4 million, more than double the $US12.8 million loss a year ago.

Average prices for LCD panels fell by about 20 per cent in the fourth quarter, following a similar drop in the third quarter. This was the main cause for the loss at LG.Philips LCD, Philips said in its fourth quarter and 2002 results.

LG.Philips LCD sells to display and notebook makers, not directly to end users. A drop in LCD panel prices has translated into lower PC displays and notebooks prices, but Philips expects the price of those products to increase as end users now flock to stores looking for bargains.

"Monitor prices have come down significantly the past months. We expect a small price increase in the first quarter. You always see the cycle of panel prices coming down, that creates demand, and then vendors raise their prices," a Philips spokesman, Jeremy Cohen, said.

The fourth quarter brought some recovery in LCD panel shipments as vendors sold through much of the stock after the inventory build up in the third quarter. However, end-user demand remained weak but was heading up now.

Revenue at LG.Philips LCD reached $US734 million in the fourth quarter, up from $US516.2 million in the final three months of 2001.

LG.Philips LCD is a joint venture between Philips of Amsterdam and LG Electronics of Seoul. For the full year 2002, the company reported a $US336.5 million net profit, against a $US204 million loss in 2001.

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