* Demand for film used in LCD panels has been weak since Aug
* Fujifilm, Konica see slow recovery in Oct-Dec
* Fujifilm sees 10/11 LCD film sales Y215-220 bln, beats plan
* Sees 10/11 LCD film shipments up 12-13 pct vs 10 pct target
(Recasts with Konica Minolta interview)
By Sachi Izumi and Reiji Murai
TOKYO, Sept 22 Japan's Fujifilm Holdings (4901.T)
and Konica Minolta Holdings (4902.T) expect LCD film demand to
recover only slowly through December due to lower-than-forecast
growth in LCD TV sales, company executives said on Wednesday.
Sales of high-tech film used in liquid crystal display (LCD)
screens have slowed in the past few months after panel makers
betting on strong business bought the component in bulk earlier
this year and saw a hefty buildup of stocks.
Panel production is expected to start recovering from October
but will likely remain soft for the rest of the year, Hisamasa
Abe, the head of Fujifilm's flat panel display materials
division, told Reuters in an interview.
"The feeling about a month ago was that it will come back
strong from October, but now we expect a slow recovery from
October and it will take until December or so for the industry to
really come back," he said.
Fujifilm dominates the market for high-tech film for LCD
panels, such as triacetyl cellulose (TAC) film which protects
polarisation plates. It holds nearly 80 percent of the TAC film
sector, with Konica Minolta taking most of the rest.
Fujifilm and Konica Minolta supply TAC film to panel makers
such as Samsung Electronics (005930.KS), LG Display (034220.KS)
and Sharp (6753.T), through LG Chem Ltd (051910.KS), Nitto Denko
(6988.T) and other polariser makers.
NORTH AMERICA, CHINA COOL OFF
Research firm DisplaySearch estimated in June that global LCD
TV shipments would rise 29 percent in 2010 but there were some
indications of trouble in key markets in April-June, with TV
shipments in North America dropping and China's LCD TV market
According to Bank of America Merrill Lynch analyst Ryohei
Takahashi, Fujifilm's TAC film sales dropped 35 percent
month-on-month in August.
Despite the recent slowdown, Fujifilm's Abe said the company
expected LCD film shipments to rise 12-13 percent in the business
year to next March, buoyed by brisk first-half demand that beat
its earlier forecast of 10 percent growth.
He said film demand was likely to continue growing in coming
years on the back of rising sales of LCD TVs.
Sales in its flat display panel material division will likely
beat its original target of 210 billion yen ($2.5 billion) and
reach 215 billion to 220 billion yen this business year, helped
also because price declines will likely be limited, Abe said.
The company generated 216.5 billion yen in LCD film sales in
the last financial year.
But Masami Akiyama, who leads Konica Minolta's LCD film
business, warned that downward price pressure may increase in the
second half of the financial year.
"The demand-supply balance of all components was very tight
in the first half, and the price fall ended up being smaller than
expected and than in the past, not only for polarisers but for
other materials including TAC film," he said.
"But now the demand side has lost steam, and TV prices may
fall further, so (TAC film) prices could come under pressure."
Demand for larger film sizes is expected to keep growing as
bigger TVs become popular, and Fujifilm is investing 40 billion
yen to build new LCD film-making lines to supply wide film.
It will decide next year, depending on market conditions,
whether to add an extra line, which would likely cost about 18
billion yen, Abe said.
Konica Minolta also started operating a new line for wide
film in July.
(Additional reporting by Isabel Reynolds; Editing by Michael
Watson and Edmund Klamann)