Sat, Jan 03, 2009 - Page 12 News List

LG Display shares rise 11% on price stability speculation

CUTBACKS: LG Display, Sharp and AU Optronics have all cut production and Chi Mei Optoelectronics is reportedly laying off up to 5 percent of its workforce

BLOOMBERG, WITH STAFF WRITER

Shares in LG Display Co, the world’s second-largest manufacturer of liquid-crystal-display (LCD) panels, rose the most in almost two months in Seoul trading on speculation that panel prices will halt their decline this month as manufacturers cut output.

LG Display climbed 11 percent to close at 23,400 won (US$17.71) on the Korea Exchange in Seoul, the biggest advance since Nov. 7.

The benchmark KOSPI index gained 2.9 percent.

Prices of notebook and television panels are expected to be flat this month after declining for the past six months, David Hsieh (謝勤益), an analyst at researcher DisplaySearch, said on Wednesday.

Some LCD makers have raised prices of computer monitor panels to their customers this month, Hsieh said.

PRODUCTION CUTS

LG Display, Sharp Corp and AU Optronics Corp (友達光電) are cutting back production as the global recession erodes demand and panel prices slump. LG Display last month reduced its profitability forecast because of a bigger-than-expected decline in prices.

“Monitor panel prices have a chance to stop dropping in January as panel makers are forced to minimize their losses,” Taipei-based researcher WitsView Technology Corp said on Wednesday.

Prices of 19-inch LCD monitor panels declined 42 percent from July to last month, while 37-inch television screens fell 38 percent, WitsView said.

LAY-OFFS

In related news, Taiwanese flat-panel maker Chi Mei Optoelectronics Corp (奇美電子) plans to lay off between 3 percent and 5 percent of its full-time employees before the Lunar New Year, the Chinese-language Economic Daily News reported yesterday.

Chi Mei, the nation’s second-largest flat panel maker by revenues after AU Optronics, said the workforce reduction was necessary because of a slump in demand caused by the global economic downturn, the newspaper cited a Chi Mei official, who spoke on condition of anonymity, as saying.

Last month, Chi Mei sacked nearly 3,000 temporary workers after a slowing economy cut into demand. At the time, the Tainan-based company said its permanent staff would not be affected by its downsizing plans.

It is estimated that around 900 of the company’s 17,000 full-time employees could receive pink slips before the holidays, the report said.

The Economic Daily News said Chi Mei had no plans to cut its workforce by a larger amount.

The company would instead work to adjust its production capacity and organizational structure to comply with current market conditions, the report said.

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