Flat-Panel Growth Picture Turns Fuzzy

The thin-screen high-definition TV market has been on a tear the past few years, as consumers toss aside their conventional cathode ray tube sets for sleek new expensive models.

While playing out in particularly volatile hot and cold cycles, the overall sales trend has been very good to players like LCD glass maker Corning (GLW Quote) and chipmakers like Zoran (ZRAN Quote) and Trident Microsystems (TRID Quote).

But recent reports from other industry players have raised concerns about the health of the big TV market.

Last Wednesday, TV distributor Syntax-Brillian (BRLC Quote) took a beating from investors after slashing sales guidance by 30%. The Olevia brand TV shop claimed that -- among other things -- a credit crunch among suppliers in Asia had dimmed the business outlook.

Observers warn the company is not a good tell for the market and is struggling with its own issues, including an unusual amount of accounting adjustments in its fiscal fourth-quarter financial report and the announced departure of its CFO. Corning, a Syntax-Brillian supplier, recently reaffirmed that it expects to see healthy growth this year.

"I think retailers are being more cautious about the fourth quarter, watching to see if this is a midcycle slowdown or a recession," says one money manager who is short Corning and was short Syntax-Brillian.