LCD Picture Getting Brighter, Corning Says

It forecasts brisk growth in the television glass market.
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Corning

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is keeping its rosy outlook on glass growth.

Given the growing popularity of liquid crystal display TVs, Corning now predicts glass demand for LCD TVs next year will be as large as the entire TV glass market was in 2004.

Speaking at a Needham investment conference in New York Tuesday, Corning CFO Jim Flaws said with average screen sizes increasing and prices coming down, LCD glass shipments will grow about 41% a year.

As the supplier of more than half of the world's LCD glass sheets used to make flat panel computer monitors and TVs, Corning is often prone to play industry prognosticator. And though Corning has been dismally wrong in the past, most observers are willing to listen when the glass giant gets behind a podium.

In fact, some industry analysts say they are seeing even faster growth ahead.

"We are raising our 2006 LCD TV forecast to 38 million units from 36 million, based on stronger than expected fourth quarter results and first half of the year outlook," says DisplaySearch analyst David Naranjo.

About 20 million LCD TVs were sold last year, analysts say.

With prices falling, LCD TVs are expected to follow the same course as LCD computer monitors, which saw sales jump significantly as price tags shrunk.

Some industry watchers say high definition programming and high quality videos are fueling interest, but Naranjo says it's really the lower LCD TV prices that are "waging the high-definition dog."

One problem with Corning's perspective is that, no matter how the glass maker can produce LCD sheets, it's still reliant on the performance of its panel-making customers as well as the TV makers that use the glass.

"The LCD panel players are ramping like crazy," says Naranjo. "But if these panel guys get any hiccups, it comes back on Corning. They are coupled pretty tightly."

Corning shares hit a new four-year high Tuesday rising 56 cents to $23.11 in midafternoon trading.