LCD glass substrate manufacturers NEG & Corning have posted 20%-plus jumps in profit for the Oct-Dec quarter of 2006. NEG reported operating profit margin of 27% for the period. Corning, meanwhile, has reported sales of US$ 1.37BN. Net profit at the US firm was US$ 646M, for a net profit margin of 47 %. "This reconfirms the high earning power of glass substrates", says Yuji Matsumoto, an analyst at Nomura Securities Co. Retails prices of LCD televisions fell an estimated 20-30% on average in 2006. Consequently, LCD TV parts makers are under increasing pressure to cut prices. However, glass substrate prices fell only 5-10% in 2006. This is relatively stable compared with the 25-30% & 20-30% falls for polarizing plates & color filters. If the declines stay at around this level, glass substrate makers will likely absorb them through cost cuts & production economies of scale. The LCD glass substrate market remains dominated by Corning, Asahi Kasei Corp. and Nippon Electric Glass, and there is little prospect that prices will slump because of new entrants.
