TV screens get cheaper as investment declines

Seoul-based LG.Philips LCD Co., the world’s second-biggest LCD panel maker, cut its capital spending plan for this year by two- thirds to about 1 trillion won ($1.1 billion). And Suwon-based Samsung Electronics Co., the world’s biggest, plans to lower its LCD spending 44 percent to 1.4 trillion won in 2007.
LCD manufacturers stepped up investment in multibillion-dollar factories in 2005 as profits rose, resulting in a flood of TV screens that drove down prices. LCD panel prices have fallen by 25 percent to 30 percent annually, according to Hyundai Securities Co. analyst Jeff Kim in Seoul.
Declining prices have spurred demand, helping LCD shipments to outpace other types of TVs. LCD TV sales may jump 56 percent this year, while plasma TV shipments may rise 33 percent to 12.9 million units, according to Austin, Texas-based researcher DisplaySearch.
And AU Optronics Corp., maker of liquid-crystal displays for Sony Corp., will delay expansion of its factories by almost a year after a global glut led to a record loss last quarter.
Producers in the $70 billion LCD market, including Samsung Electronics Co. and LG.Philips LCD Co., will probably cut investment by 28 percent in 2007, the second consecutive yearly drop, according to Lehman Brothers Holdings Inc.