The chief executive of LG Display Co. (LPL, 034220.SE) said the company isn’t currently fulfilling strong panel orders from Apple Inc. (AAPL) for its new tablet computer, the iPad, which is seen to have slowed the global sales of the device. But the South Korean flat-panel maker said it may be able to fill the orders by the second quarter of next year.
“Apple is ordering more and more displays [for iPad] but it isn’t something we can be able to respond quickly,” Chief Executive Kwon Young-soo told a group of reporters late Thursday. “I am not sure whether we can be able to meet orders from other companies for similar products, but we will be able to supply the displays without fail for Apple by the second quarter of next year.”
Some Asian manufacturers have been recently ramping up production of key components for electronics, as shortages have frustrated consumers and disrupted business for companies such as Apple. LG Display Co., the world’s second-largest liquid-crystal-display maker by revenue after Samsung Electronics Co. (005930.SE), is a major supplier of flat screens used in Apple’s iPad and iPhones.
Reflecting such concerns, LG Display said Thursday it will invest about KRW618 billion ($512 million) to build a 4.5 generation production line that can produce mobile displays used in smartphones and tablet PCs to meet robust demand.
Meanwhile, unlike smaller displays, Kwon said, LG Display is currently seeing a high level of television inventories from set makers, and that the company may have to cut production of panels used for televisions in August.
“Most TV set makers had set too aggressive sales targets early this year, but they saw weaker sales of TVs following the global financial woes, leading to higher inventory levels, and LCD orders [for TV panels] have been falling recently,” Kwon said.
Kwon said the impact from the European-led economic weakness on its business will only last about two months–July and August–and that the high TV inventories would return to a normal levels in September.
On Thursday, LG Display posted a second-quarter net profit of KRW555 billion ($461 million), up from KRW367 billion a year earlier. Operating profit more than doubled to KRW726 billion from KRW352 billion, while sales rose 35% to KRW6.45 trillion from KRW4.77 trillion
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