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Tube monitor demand may drop 15 percent

LG.Philips Displays International Ltd, the world's No. 1 maker of cathode-ray tubes for televisions and computer monitors, expects demand for glass tube-based displays used in monitors to drop 15 percent this year.

Sales of tube-based computer monitors worldwide may drop to 70 million units this year because more monitors use liquid crystal displays, LG.Philips chairman and chief executive Andreas Wente said.

The 20-month-old venture between LG Electronics Inc and Koninklijke (Royal) Philips Electronics NV aims to sell at least 21 million units, boosting its share of the declining market to more than 30 percent from 28 percent last year.

"The CRT market is falling quickly because the market is being cannibalized by LCD," said International Data Corp analyst Manny Lopez. "Many personal computer vendors are bundling LCD instead of CRT monitors so they can make a little bit more money from customers."

Hong Kong-based LG.Philips closed at least three factories and fired 7,000 workers in the past two years. The cuts will help the company post its first profit this year, though sales may be little changed from US$4.4 billion last year, Wente said.

About 60 percent of the computers sold worldwide use glass-tube displays, and that may fall to 40 percent by 2006, LG.Philips forecasts. Falling demand and prices of glass-tubes caused Samsung SDI Co, LG.Philips' biggest rival, to post an 8.7 percent drop in net income in the fourth quarter.

Wente said in an interview: "We know this is happening. We must act on it."

The venture is taking advantage of the cheaper price of its tubes to attract customers in less-developed countries such as China and India, analysts said.
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