LG Display to slash next year’s capital spending

LG Display to slash next year's capital spendingLG Display, the flat-screen maker, will be slashing capital spending for the next quarter by a quarter as booming sales of mobile devices from iPads to Android smartphones saps demand for TV panels, its main source of earnings.

“LCD makers will keep 2012 investment plan conservative and LG is also likely to cut spending again as visibility is very low due to weak demand especially from Europe and the United States,” John Soh, an analyst at Shinhan Investment & Securities, said on Monday.

From Reuters.com:

Weak demand for PCs and TVs are a big concern for LCD panel makers as the two products account for nearly 90 percent of large-sized flat-screen panels.

LG Display’s smaller rivals, Taiwan’s AU Optronics and Chimei Innolux Corp have cut their capital spending for this year.

LG Display, a major panel supplier for iPads and iPhones, has steadily increased sales of tablet and e-book panels to try and make up for weak demand in TVs and computer screens.

This month, a media report said LG Electronics, the world’s No.2 TV maker, had cut its TV sales target this year by 20 percent, joining Sony in bracing for weaker sales due to uncertain global economic prospects.

“We plan around 3 trillion won ($2.8 billion) of capital spending next year and have no plans to build a new factory,” a LG Display spokesman said, confirming comments made by its chief executive to local media in an interview.

“LG is likely to report losses widening in the current quarter and the outlook for the next nine months or so is dreadful due to weak PC and TV demand,” Soh added.

Comments are closed.