LG.Philips LCD Co, the world's largest maker of liquid-crystal displays, more than tripled its group net income last year, underscoring the shift in consumer preference toward flat screens instead of bulkier glass tubes.
Profit rose to 1 trillion won (US$881 million) from 289 billion won a year earlier, Seoul-based LG.Philips said in a regulatory filing. Sales jumped 71 percent to 6.1 trillion won.
LG.Philips, a venture between Korea's LG Electronics Inc and Royal Philips Electronics NV of the Netherlands, and other LCD makers are investing billions of dollars in production facilities as demand for slimmer screens rises. Global sales from LCDs, which overtook the computer memory-chip market last year, will grow 56 percent this year, industry researcher IDC said.
"The LCD market has gotten a lot of investor attention since the middle of last year, given its bright prospects," said Kang Shin Woo, who oversees about US$1.5 billion as chief investment officer at PCA Investment Trust Management Co in Seoul. "Growth continues to be good as LCD TV demand seems to make up for the slowing growth in demand for LCD monitors."
Shares of Samsung Electronics Co, the world's second-biggest LCD maker, have risen 26 percent in the past three months and shares of Taiwan's AU Optronics Corp (
IDC joins other industry researchers in seeing a boom in LCD sales. Texas-based DisplaySearch said earlier this month that fourth-quarter LCD shipments rose 61 percent from a year earlier to 30 million screens, a fifth more than what the research company earlier expected.
"Demand for LCD TVs will drive the next wave of growth in the LCD panel market," IDC analyst Stanley Jeong said in a press release yesterday. "Revenue in the LCD-TV market segment will grow at such a torrid pace that it will exceed revenue in the notebook panel market by 2005."
Sales of panels geared for televisions are projected to grow an average of 75 percent annually through 2007, according to DisplaySearch. By comparison, the researcher expects average annual growth of 18 percent for panels geared for computer monitors and 5 percent for notebook panels.
Rising demand has prompted LG.Philips to lead development of a US$22 billion LCD industrial complex in South Korea by building the world's biggest flat-screen factory. Suwon, Korea-based Samsung Electronics plans to spend 20 trillion won (US$17.3 billion) in the next 10 years on an LCD complex southwest of Seoul.
Still, investors such as CJ Investment Trust Management Co's Chung Doo-sun say that it's too early to invest in LCDs solely because of TV demand. TVs accounted for about 9 percent of global flat-panel revenue last year, compared with 51 percent for monitors in computers and notebooks, according to DisplaySearch.
"TV is showing fast growth but it still accounts for a small portion of the total," Chung said. "It's going to be 2007 or 2008 before investors get a clear picture about TV demand."
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