Samsung Electronics saw the operating profits of its LCD division drop 30.6% sequentially (while remaining up 491.2% on year) to 0.07 trillion won (about US$73 million) in the second quarter of 2006, amid weak panel pricing, but the company said it is optimistic about the panel industry in the third quarter and has raised its forecast again for overall TV-panel shipments this year.
The range of panel-price reduction during the second quarter was larger than expected, the maker said. In general, prices for large-size panels were reduced 10-20% sequentially, with those for monitor panels dropping the most (21%) to US$106, the company indicated.
Samsung was still able to remain profitable at its LCD division as a result of a tendency to migrate to large-size panels, the company said.
Strong growth in 40-inch-and-above TV-panel shipments has offset the negative impact of weak notebook demand. Despite a reduction of 4.6%, sequentially, in Samsung's notebook-panel shipments in the second quarter, its TV-panel shipments increased 28.6%, with shipments of 40-inch-and-larger TV panels rising by a strong 87% to 1.2 million units due to strong demand, the maker noted.
In addition, the company has been shifting to larger-size segments for its monitor panels, so shipments of its 20-inch-and above monitor panels increased 39% sequentially to 700,000 units in the second quarter, compared with sequential growth of 1.7% for its overall monitor-panel shipments, Samsung said.
Contrary to major competitors such as LG.Philips LCD and AU Optronics (AUO), Samsung does not have any plans to cut its production. The maker said it will continue to ramp up its seventh-generation (7G) LCD capacity from 102,000 glass substrates per month in the second quarter to 133,000 per month in the third quarter, to accommodate rising need.
Samsung expects panel prices to stabilize in the second half of this year as a result of seasonality and lower inventory levels. The company has raised its forecast for the overall TV-panel market in 2006, once more, to 48 million units, up from 40 million forecast in January and a forecast of 44 million in April.
PC-use panel demand will pick up in the second half of this year boosted by price elasticity and seasonality, the company indicated.
The panel maker expects its large-size panel shipments to rise 11.6% to 14.4 million units in the third quarter, up from 12.9 million in the second quarter, with the notebook-use and TV-use segments to be the major driving forces for sales, increasing 17% and 18%, respectively.
In the second quarter, Samsung's LCD division had sales of 2.85 trillion won, a 6% sequential increase for 34% on-year growth. Samsung's combined revenues grew 1% to 14.11 trillion won.
| Samsung: Large-size panel shipments by application, 2Q06 (million units) | |||
| Application | 1Q | 2Q | Q/Q |
| Monitor | 6.0 | 6.1 | 1.7% |
| Notebook | 4.3 | 4.1 | 4.7% |
| TV | 2.1 | 2.7 | 28.6% |
| Total | 12.4 | 12.9 | 4.0% |
Source: company, compiled by DigiTimes, July 2006.
| Samsung: Large-size panel prices, 2Q06 (US$) | |||
| Application | 1Q | 2Q | Q/Q |
| Monitor | 182 | 150 | -17.6% |
| Notebook | 134 | 106 | -20.1% |
| TV | 876 | 790 | -9.8% |
Source: company, compiled by DigiTimes, July 2006.
| Samsung: Large-size panel demand outlook, 2006 (million units) | ||||
| Application | 1H | 2H | 2006 | Y/Y |
| Monitor | 62 | 71 | 133 | 21% |
| Notebook | 35 | 40 | 75 | 21% |
| TV | 21 | 27 | 48 | 72% |
| Others | 4 | 4 | 8 | 15% |
| Total | 122 | 142 | 264 | 28% |
Source: company, compiled by DigiTimes, July 2006.
Article edited by Chris Hall
