South Korean flat-screen maker LG.Philips LCD is in talks with several major TV makers about taking a stake in the firm and does not rule out Japanese companies, a company executive said on Wednesday.
LG.Philips is searching for a strategic buyer following Philips Electronics's $2.2 billion stake sale in the South Korean firm earlier this month. Investors worry about what Philips, Europe's biggest consumer electronics maker, will do about its remaining 19.9 percent stake in the joint venture with LG Electronics Inc.
We are under discussion with some strategic partners ... with major brands to whom LG. Philips can supply TV panels, LG.Philips LCD Executive Vice President Bock Kwon told Reuters in an interview. Japanese firms could be candidates, he said.
They have access to a worldwide market and a strong local brand, he said.
He also said panel demand looks firm for the seasonal slow season in October-December, as TV makers seek to pile up inventory ahead of a burst in demand in 2008.
Panel sales would pick up again in April-June, he said.
LG.Philips, which saw its strongest profit in 13 quarters in July-September, predicts a shortfall in LCD TV panel supply in 2008, helped by demand for sleek TVs before the Olympic games.
Panel makers are eyeing growth from 2009 onward fueled by falling prices, cost cuts and a move to digital broadcasting, with LG.Philips planning to invest about 2.7 trillion won on a new plant to go reach capacity of 83,000 substrates per month in the first half of 2009.
If panel demand does not hold up as expected, however, that could mean another supply glut. The LCD sector's recovery this year was helped by industry players trimming investments after suffering heavy losses in 2006.